Thanks to the effective control of COVID-19 epidemic，the efficient hedging of counter-cyclical regulation policies and the orderly connection of cross-cyclical adjustments，China’s monetary policy and financial situation gradually returned to a relatively neutral level from extremely loose in 2021. Specifically，under the background of tighter macro policies and weaker financing demand，the growth rate of credit and total social financing，and macro leverage ratio decreased；the liquidity in money market was generally stable，and the short-term interest rate fluctuated at a low level；the domestic stock market was characterized by slight increase，differentiated internal structure and intensified volatility；the bond market was trapped into structural asset shortage，and credit bond financing recovered with obvious differentiation；the real estate market has cooled significantly；the soaring trend of domestic commodity prices has been effectively controlled；RMB exchange rate continued to rise. Looking forward to 2022，China’s financial risk prevention mainly lies in four aspects：external shock risk，real estate risk，local goverment debt risk，and small and medium-sized bank risk. Accordingly，monetary and financial policies need to focus on the dynamic balance between steady growth and risk prevention，and strengthen cross-cyclical adjustments. Firstly，adhere to the structural regulation and moderately loose the aggregate monetary policy to achieve potential economic growth. Secondly，focus on preventing external shocks，especially the spillover risk caused by the change of Fed’s policy；Thirdly，prepare major domestic risk response plans including the prevention of real estate risks；fourthly，promote the market-oriented reform of interest rate to reduce the financing cost of real economy.