PBOC’s Pan Gongsheng Pledges Continued Shift in Monetary Policy Framework

The shift toward price-based tools and away from bank lending as a single target signals a deeper rethinking of how Chinese credit actually works: as loan growth slows, aggregate financing becomes something to watch rather than steer. That matters most for banks and borrowers whose behaviour has long been shaped by quantitative guidance, and for how rate signals transmit into real financing costs. The open question is execution — whether market-driven rate formation can function while the central bank still leans on window guidance and curbs what it calls involutionary competition.