China’s Credit Structure Optimized and Financing Costs Decline in First Half of the Year
At a recent press conference held by the State Council Information Office, the person in charge of the People’s Bank of China provided a detailed analysis of the country’s financial statistics for the first half of the year and addressed various concerns.
One of the key highlights of the conference was the strong support provided to the real economy. Deputy Governor of the People’s Bank of China, Liu Guoqiang, stated that the country’s sound monetary policy has been precise and powerful, with increased counter-cyclical adjustments to promote overall economic improvement. The credit structure has been optimized, and the momentum of economic development has been enhanced.
According to data, China’s RMB loans increased by 15.73 trillion yuan in the first half of the year, a year-on-year increase of 2.02 trillion yuan. The majority of new loans were invested in key areas such as manufacturing and infrastructure industries. The balance of medium and long-term loans in the manufacturing industry increased by 40.3% year-on-year, while the infrastructure industry saw a 15.8% increase. Financial institutions also increased support for inclusive finance and technological innovation, with specialized loans for small and medium enterprises increasing by 20.4% year-on-year.
Additionally, the cost of corporate financing and resident credit has steadily declined. The weighted average interest rate of newly issued corporate loans decreased by 25 basis points compared to the previous year, and the weighted average interest rate of newly issued individual housing loans decreased by 107 basis points.
Liu Guoqiang also emphasized that there is still sufficient policy space to deal with unexpected challenges. He highlighted the significant rebound in financial data, such as the strengthened support for private small and micro enterprises and manufacturing. The power of scientific and technological innovation, green transformation, and the recovery and upgrading of the consumer market were also noted as positive factors for China’s economy.
Regarding future monetary policy, Zou Lan, Director of the Monetary Policy Department of the People’s Bank of China, stated that the bank will continue to implement a sound monetary policy accurately and forcefully. Various monetary policy tools, including the deposit reserve ratio, medium-term lending facilities, and open market operations, will be used to maintain reasonable liquidity in the banking system and promote a decline in the cost of corporate financing and residents’ credit.
The press conference also addressed the real estate market, which showed signs of stabilization in the first half of the year. Personal housing loans increased significantly, totaling 3.5 trillion yuan, while the balance of personal housing loans declined year-on-year. This was attributed to changes in price relationships and residents using deposits or reducing other investments to repay existing loans. The financial sector supports negotiations between borrowers and commercial banks to change contractual agreements or replace existing loans with new ones.
Zou Lan highlighted the need to improve the accuracy of real estate financial policies by applying policies according to the city. The financial sector will strengthen policy research and extend applicable policies to assist real estate companies in digesting long-term accumulated risks. The People’s Bank of China will continue to prioritize “housing and housing, not speculation” and provide financial support for industry risks to create a favorable financial environment.
In conclusion, China’s credit structure has been optimized, financing costs have declined, and the real economy has received strong support in the first half of the year. The government is taking measures to ensure the stability of the economy, improve the accuracy of real estate policies, and maintain a reasonable growth in money and credit.