(Bloomberg) -- China’s central bank governor pledged to keep the growth of money supply in check and offer better support to key sectors including technology and advanced manufacturing, illustrating the nation’s focus on enhancing the quality of credit.

Pan Gongsheng reaffirmed that the People’s Bank of China will “control the monetary sluice” in an article in the People’s Daily on Monday that laid out the central bank’s priorities in response to a recent twice-a-decade financial policy meeting. Officials have used the language in the past to underscore the PBOC’s desire to avoid massive easing leading to a rapid buildup of debt. 

The PBOC will enhance the efficiency of existing loans, Pan wrote in the Communist Party’s flagship newspaper, saying that “some enterprises have occupied a large amount of financial resources inefficiently.” He also reiterated the central bank will step up support to strategic sectors like tech, manufacturing and private firms.

The language indicates “the PBOC will unlikely let loose the floodgate of credit, and it will instead optimize the quality and structure of credit,” said Bruce Pang, chief economist for greater China at Jones Lang LaSalle Inc. The central bank may utilize more structural policy tools to guide funds into targeted areas, he added.

See: China’s Central Bank Signals Slower Credit Growth, Lower Rates

That view is in line with the central bank’s recent guidance for banks to cap the amount of new loans they issue in early 2024 and shift some forward to this year. The PBOC also foreshadowed a slowdown in credit issuance when it highlighted rapidly growing new loans in key sectors like tech in a policy report last week.

Speculation is mounting that the PBOC may provide cheap funding to major property and infrastructure-related projects, including its affordable housing program. Markets are also expecting the central bank to trim lenders’ reserve requirement ratio, which determines the amount of cash they must set in reserve, in the coming months. That would help banks absorb a surge in government bond issuance.

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