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Financing

China's prudent monetary policy will be eased or tightened to the right degree, and Pan said the country will use flexible monetary policy instruments in the days ahead, especially countercyclical and structural tools. This will stabilize macro-leverage ratios while dropping money market rates, optimizing effects of credit policies and enhancing support for private and small businesses.

The government proposed measures to alleviate difficulties faced by enterprises in accessing affordable financing, such as more targeted cuts made to required reserve ratios for medium and small banks, and loans to be granted to small and micro-businesses by large State-owned commercial banks this year will increase by over 30 percent.

At the same time, the report also said increases in M2 money supply and aggregate financing should keep pace with nominal GDP growth.

Shen Minggao, chief economist at GF Securities, said as the M2 growth rate was lower than nominal GDP growth in the past, the new target shows some wiggle room in this regard, including taking measures like cutting reserve requirement ratios and interest rates.

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