Multiple Policy to Keep Prices Basically Stable

Recently， holding a video and teleconference， the People’s Bank of China conveyed the requirement of the Standing Commission of State Council to combat the spring drought and promote grain production， and the theme of the video and teleconference of State Council about national grain production. During the conference， the People’s Bank of China deployed its efforts in supporting the combat against the spring draught and to ensure the normal level of grain production fi nancially. Mr. Du Jinfu， member of the Party Committee and Vice President of the People’s Bank of China， attended the conference and gave a speech;In his speech， Mr. Du pointed out， during the past few years， the People’s Bank of China has placed great emphasis on the combat against the spring drought by providing fi nancial support. A number of measures have been made to increase the fi nancial support enjoyed by the farming section， rendering financing a positive element in stabilizing and increasing grain production. First， specific policies were issued. T e bank printed and distributed Opinions Concerning Better Financial Service for Farmland and Irrigation and Urgent Notice about Financial Support for Agricultural Production and Anti-drought Campaign of Southwestern Regions in the Spring， aiming at guiding and supervising all fi nancial organs in providing service for agriculture and the combat against drought to safeguard the grain production. Second， comprehensive application of multiple currency policies to encourage fi nancial organizations to lend more for the benefi t of the development of “agriculture， farmers and rural areas”. The People’s Bank of China encouraged fi nancial organizations to invest more in lending concerning“agriculture， farmers and rural areas”， by employing diff erent currency policies， such as diversified deposit reserve rates， encouragement for farmers to re-lend， rediscount， and fi nancial support for pilot programs of rural credit cooperatives. T ird， promotion of innovation in rural fi -nancial products and serving methods from all aspects. In October 2008， the People’s Bank of China， joined by China Banking Regulatory Commission， issued Opinions about Speeding up Innovation in Rural Financial Products and Serving Methods， launching pilot projects so that the scope of farmers’ collaterals were enlarged. In July 2010， the pilot projects were expanded to the whole country. Fourth， gradually expand the scale of debt fi nancing for rural enterprises. By the end of 2010， commercial paper (CP)， medium-term notes (MTN)， and small- and medium-enterprises’ collection notes (SMECN) worth 111.61 billion yuan had been issued by enterprises engaged in agriculture. Finally， improve the fi nancial infrastructure in rural areas. By the end of 2010， a total of 28，886 rural credit cooperatives， 1，238 rural cooperative banks， 1，164 rural commercial banks and 261 village and town banks had been connected with the paying system of the People’s Bank of China， which signifi cantly facilitates the transfer and remittance of money in the rural areas. At the same time， all over the country， 0.134 billion rural households created their credit fi les， and more than 83 million rural households had their credit graded， so that a national database including the credit information of rural enterprises and individuals had been constructed.With support from various policies and measures， loans related to agriculture by different fi nancial organizations have been on the rise. By the end of 2010， the amount had amounted to RMB 11760 billion， growing by RMB 2600 billion， and of all the loans， RMB 2300 billion went to farming， forestry， animal husbandry and fi shery， growing by RMB 355.68 billion.Mr. Du also pointed out， the People’s Bank of China would give full play to the function of its branches at different levels and take various measures to resume its efforts in financially supporting the combat against drought and the promotion of grain production. T e fi rst measure is to apply diff erent currency policies comprehensively， like re-lending， rediscount， etc.， and more fi nancial support should be directed to those areas struck by drought most seriously. T e bank will coordinate more eff ectively the re-lending among diff erent regions， and will actively encourage and guide financial organizations to distribute loans concerning seeds， chemical fertilizer， pesticides and other agricultural means of production during the spring farming and preparatory work， lending more to help the agricultural infrastructure construction. Second， facing the current combat against drought， the People’s Bank of China will spur financial organizations to invest more in lending to programs engaged in “agriculture， farmers and rural areas” by adjusting the credit structure. Third step is to encourage innovation in rural fi nancial products and serving methods. T e People’s Bank of China， in cooperation with fi nancial regulatory department， will fully implement Guiding Opinions about Promoting Innovation in Rural Financial Products and Serving Methods. In front of the rigorous combat against the spring drought， the bank will strive to make rural credit cooperatives， postal savings banks and new rural fi nancial organizations more innovative in their products and services， providing fi nancial products and services that are more pragmatic as to production and life in rural areas， with spring ploughing and grain production as their main concern. And fourthly， the bank will pay close attention to grain prices at home and abroad， and apply various currency policies to make the prospect of stable grain prices possible in terms of currency.He also emphasized， with grain production being significant to all households， providing financial support for grain production is an essential responsibility of the People’s Bank of China. T us， all branches should attach great importance to it， and by carefully conforming to the requirement of the conference， guide rural credit cooperatives to honor their role as the main force to serve and support our agriculture. T ey should improve their services and truly provide fi nancial support for the spring ploughing and the combat against the spring drought.At the conference， Mr. Du also deployed investigation groups to learn about the situation of rural credit cooperatives supporting the agriculture. To be in control of the current situation of rural financial services and the sustainability of rural credit cooperatives， he asked all branches to highlight the verifi cation of the capital quality of rural credit cooperatives. They have to probe into the innermost situation， and investigate the capital authenticity and actual operation of rural credit cooperatives after notes are honored.