China’s central bank head pledges to bolster economic recovery

The news: China’s central bank has pledged to make its policy more "precise and forceful", while guiding financial institutions to cut real lending rates and reducing financing costs.

The numbers: China's economy grew at a faster-than-expected 4.9% in the September quarter, while consumption and industrial activity in September also surprised on the upside, suggesting a recent flurry of policy measures is helping bolster a tentative recovery.

The context: Governor Pan Gongsheng said in a report published on Saturday the People's Bank of China (PBOC) will focus on expanding domestic demand, while fending off financial risks. The country will also aim to keep the yuan stable, prevent the risk of abnormal fluctuations in cross-border fund flows and maintain the stability in the foreign exchange market. Pan also said in the report China would resolve the default risk of bonds of big real estate enterprises, prevent risk contagion in stock, bond and foreign exchange markets, and ensure the stable operation of financial markets. The report is significant because it is the first time the governor has commented on policy after the publication of third-quarter economic data, outlining the authorities' near-term priorities.