The People’s Bank of China said it will keep monetary policy "moderately loose" in 2026, step up counter-cyclical adjustments and roll out "practical and effective" support promptly, while avoiding any signal of broad-based easing. In its second-half work conference statement and Second Quarter 2026 Monetary Policy Implementation Report released Wednesday, the PBOC said China’s economy grew 4.7% year-on-year in the first half of 2026, with aggregate social financing up 7.4% and M2 up 8.0% at end-June. The central bank said it will boost domestic demand, channel more resources to technological innovation and smaller firms, and conduct overnight reverse repo operations more frequently to fine-tune short-term rates. It also said loans and bond financing should be assessed together rather than focusing solely on credit growth, noting that cooling real estate and infrastructure activity and the rise of more asset-light "new productive forces" are reducing traditional loan demand. On the external backdrop, the PBOC said tighter settings by major overseas central banks amount to a limited recalibration rather than a "drastic U-turn," suggesting spillovers may be milder than in past shocks even as it warned about sovereign debt stress, equity corrections and capital outflows from vulnerable emerging markets.