China’s central bank governor has offered to deepen cooperation with emerging economies on a series of issues and to help them gain a greater voice in global financial governance during a series of speeches in Saudi Arabia.
Pan Gongsheng, governor of the People’s Bank of China, pledged to work with the Gulf states to promote currency stability, expand bilateral financial investment, and create integrated payment systems during a meeting with central bank governors from the region.
China would also work with Gulf Cooperation Council (GCC) members on digital currency and anti-money-laundering efforts, Pan added, according to a news release issued by the PBOC on Tuesday.
China has long sought to internationalise its currency, reduce its reliance on the US dollar, and enhance its financial autonomy to facilitate global trade and investment. This effort is also central to President Xi Jinping’s vision of turning China into a financial powerhouse.
On the same day, speaking at a conference organised by the International Monetary Fund and the Saudi Finance Ministry, Pan urged emerging markets to increase their exchange rate flexibility and strengthen cooperation to safeguard financial stability during a period of heightened currency volatility.
“Emerging markets face mounting challenges such as geopolitical risks, economic fragmentation, rising trade protectionism, slowing medium-term growth, financial market volatility, cross-border capital flow pressures, and rising global debt risks,” Pan said in Alula, Saudi Arabia.
He also pressed the IMF to expand support for developing nations and accelerate reforms to its quota system to better reflect the structure of the global economy, as some countries currently have disproportionate voting power and access to IMF financing.
“The IMF should work to remove barriers to trade, investment and supply,” Pan said. “Quota adjustments are crucial for the Fund’s governance, representation and legitimacy.”
China holds a 6.09 per cent voting share in the Washington-based fund – far below the 16.5 per cent held by the United States – despite accounting for roughly 18 per cent of global economic output.
The Communist Party’s flagship newspaper, People’s Daily, noted in a 2024 report that about 41 per cent of IMF member states – mostly emerging markets and developing economies – remain under-represented, while others hold disproportionate influence.
Pan also said that China would maintain a stable yuan in an effort to support global financial and economic stability, as a surge in the US dollar weakens non-dollar currencies around the world.
“We will implement macroprudential measures to curb excessive exchange rate swings and keep the yuan broadly stable at a balanced and adaptive level,” Pan vowed.
Gary Ng, senior economist at French investment bank Natixis, said Beijing’s focus on yuan stability suggested there was limited room for interest rate cuts, even amid persistently low inflation.
“The recent improvement in sentiment has supported the yuan, but any renewed strength from the greenback can still bring the exchange rate to 7.35 before it gets better,” Ng said.
According to Pan, China is placing growing emphasis on boosting consumption, with policies aimed at boosting household incomes and stimulating domestic demand through subsidies.
“As a next step, the Chinese government will implement a more proactive fiscal policy and an appropriately loose monetary policy, strengthen the countercyclical adjustment of macroeconomic policies, continue to promote the transformation of China’s economic growth model, and consolidate and strengthen the momentum of economic recovery,” Pan said.
The PBOC has acted to shield the yuan from excessive depreciation pressures in recent weeks, emphasising that it does not intend to offset the impact of US tariffs by weakening its currency.
On Wednesday afternoon, the offshore yuan edged lower from the day before, trading at around 7.288 per US dollar.