China Looks to Normalize Monetary Policy as Economy Stabilizes

Shoppers browse stores in Beijing, China on Sept. 20.

Photographer: Yan Cong/Bloomberg

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China’s central bank is seeking to normalize monetary policy as the “economy recovers steadily,” in another sign that the country’s policy makers are gradually pulling back from the stimulus measures enacted amid the Covid-19 pandemic.

The People’s Bank of China will make monetary policy more precise and targeted, it said Monday in a statement after the quarterly policy meeting. The PBOC called on banks to make full use of structured monetary tools to increase the “directness” of its policies and vowed to achieve a long-term balance between stabilizing growth and preventing risks.

As the first major nation to halt the spread of the coronavirus, China’s economy is recovering with rising exports and a rebound in production. Yet consumer spending is still much weaker than last year and smaller firms are struggling because of less demand.

Read more: China’s Rebound Lost Momentum in September, Early Data Show

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