People walk past the headquarters of the People's Bank of China in Beijing.
China's central bank removed several phrases on policy restraint in a quarterly report, a move economists said may be a sign that the country's economy is on the mend.
The People's Bank of China has kept monetary policy the same since last year. The growth of the economy has slowed in the last few months due to a regulatory squeeze on the property sector, power shortages at factories and lackluster consumer spending.
The third quarter report on monetary policy did not mention how the central bank would not engage in large-scale, flood-like stimulation. It is a phrase that indicates policy restraint and has appeared in central government statements since the beginning of the year.
According to a report Sunday, the deletions represent an official change to the policy stance of the central bank and set the stage for more decisive monetary and credit easing. He said that China is in its worst economic downturn since 2015.
Lu pointed to a deletion about controlling money supply, a measure of cash and other easily usable currency. Spending in the economy is stimulated by expanding the money supply.
The deleted reference to money supply was first made in a report in November 2020, when the central bank was about to wind down its stimulatory policies.
Hu said the removal of the phrase set was the stage for a step-up in monetary easing.
The PBOC deleted a reference to maintaining normal monetary policy in a section about keeping monetary policy flexible and targeted.
Hu said that the PBOC is more cautious about inflation. The authors of the central bank's latest report deleted a reference to how there was no basis for long-term inflation or deflation.
Beijing will move stealthily even with these signals.
The PBOC has kept its benchmark lending rate the same for 19 months.
Bruce Pang, head of macro and strategy research at China Renaissance, said in Chinese that there was no major shift in monetary policy.
Pang said policymakers have not used the phrases much in the last month or so, so they should not use them anymore.
We believe the worst for the property market and the economy is yet to come, and only then will we see some real changes to the property curbs.
The PBOC maintained its strict stance on the property market despite growing concerns about the economy.
China Evergrande teetered on the edge of default in the last few months, following Beijing's efforts to reduce real estate developers' reliance on high debt levels for growth.
The central bank said in the report that the risks in the real estate market were controllable and that the healthy development of the industry would not change.
The worst for both the property market and the economy is yet to come, and only then will we see some real changes to the property curbs.
