China's economy demonstrated resilience in the first three quarters of 2025, with GDP growth reaching 5.2% year-on-year, according to the People's Bank of China (PBoC) Q3 monetary policy execution report released on Nov. 11. The report highlights the central bank's ongoing efforts to maintain liquidity, manage credit growth, and support structural adjustments in the financial system amid external uncertainties.

Key monetary policy actions and outcomes include:

• Credit and liquidity management: PBoC maintained ample liquidity through open market operations, medium-term lending facilities, and targeted refinancing programs. As of September, total RMB loans reached 270.4 trillion yuan, with broad money supply (M2) up 8.4% year-on-year and total social financing stock up 8.7%.

• Financing costs: Market-based interest rate reforms and strengthened policy execution helped lower financing costs. In September, newly issued corporate loan rates fell roughly 40 basis points, while new residential mortgage rates declined about 25 basis points.

• Credit structure optimization: Targeted lending programs, including 500 billion yuan for consumer and elderly care loans and additional quotas for technology innovation and industrial upgrades, were deployed to support domestic consumption, technology development, and small and medium-sized enterprises.

• Exchange rate stability: The RMB remained broadly stable against the US dollar, with the September midpoint rate appreciating 1.2% from end-2024. The PBoC emphasized a market-driven, managed-floating exchange rate system, aiming to prevent excessive volatility while maintaining macroeconomic balance.

• Financial risk management: Ongoing monitoring, assessment, and early-warning systems were used to manage sector-specific risks, with the goal of safeguarding overall financial stability.

The report notes that while global economic growth remains uneven and external risks persist, China’s domestic economy continues to benefit from structural advantages, strong resilience, and potential for long-term growth. The PBoC will continue to implement an appropriately accommodative monetary policy, using a combination of quantity, price, and structural tools to balance short-term stabilization with long-term financial health. Focus areas include supporting technology innovation, boosting consumption, stabilizing small and medium-sized enterprises, and maintaining orderly foreign trade.

Implications for international investors and financial institutions: The report signals a consistent commitment to liquidity provision, credit cost containment, and financial stability. Markets can expect a steady RMB, targeted support for high-priority sectors, and controlled credit expansion, providing a clearer framework for evaluating exposure to Chinese financial assets, corporate lending, and cross-border investment opportunities.