China's slower monetary growth can meet needs of economy - PBOC official

As China's economy shifts from high-speed growth to high-quality development, economic activity can be sustained by a relatively slower rate of monetary expansion, a senior central bank official said.

The pace of growth in broad M2 money supply had previously exceeded the nominal rate of expansion in gross domestic product (GDP), but the economy has changed, said Sun Guofeng, head of the monetary policy department at the People's Bank of China (PBOC).

M2 money supply in April grew 8.5% from a year earlier, slightly less than the previous month, and new bank lending in April also slowed.

"In recent years, with China's economy turning from high-speed growth to high-quality development, economic growth has tended to be lighter," Sun said. "A relatively slower pace of monetary growth can meet the needs of keeping economic operation within a reasonable range."

The PBOC will make more efforts in optimising the structure of money supply while maintaining a stable total amount, Sun said.

There is ample room in China's monetary policy to deal with internal and external challenges, Sun reiterated, given the PBOC's "rich" policy toolkit.