Xinhua News Agency: Credit Structure Optimizes, Enhancing Economic Development Momentum
Beijing, July 14th – The credit structure in China has continued to be optimized in the first half of the year, leading to a decline in financing costs for the real economy and stronger financial support for economic growth. At a press conference held by the State Council Information Office on July 14th, the People’s Bank of China explained the financial statistics for the first half of the year and addressed key issues pertaining to credit allocation and the future direction of monetary policy.
Deputy Governor of the People’s Bank of China, Liu Guoqiang, emphasized that the sound and precise monetary policy, along with counter-cyclical adjustments, have contributed to the overall improvement of economic operations. The total liquidity in the market is reasonable and adequate, supporting the real economy. In terms of credit structure, the optimization process has stimulated economic development.
The data reveals that RMB loans in China increased by 15.73 trillion yuan in the first half of the year, with new loans to enterprises accounting for 81.5% of the total credit increment. Manufacturing and infrastructure industries were the main beneficiaries of these new loans. The balance of medium and long-term loans in the manufacturing industry rose by 40.3% year-on-year, while the infrastructure industry saw a 15.8% increase. Moreover, financial institutions showed increased support for key areas such as inclusive finance and technological innovation. The balance of SME loans specifically increased by 20.4%, and inclusive small and micro loans increased by 26.1%.
Additionally, the cost of corporate financing and resident credit has steadily declined. The weighted average interest rate of newly issued corporate loans in the first half of the year was 3.96%, which is 25 basis points lower compared to the same period last year. Similarly, the weighted average interest rate of newly issued individual housing loans saw a decline of 107 basis points.
The People’s Bank of China recognizes sufficient policy space to deal with unexpected challenges. Liu Guoqiang noted that financial data has rebounded significantly, supporting the recovery of macroeconomic performance. The proportion of fund payment and utilization of policy development financial instruments exceeded 70% by the end of June. Moreover, personal business loans and personal short-term consumption loans have increased by 759.3 billion yuan and 401.9 billion yuan respectively.
Liu Guoqiang further highlighted that China’s internal development potential is strong, with increasing power in scientific and technological innovation, steady progress in green transformation, and gradual recovery and upgrade of the consumer market. These factors position China to effectively cope with changes in the external environment.
Regarding monetary policy, Zou Lan, Director of the Monetary Policy Department of the People’s Bank of China, emphasized that the central bank will intensify macro-control efforts. The bank will continue to implement a sound and forceful monetary policy, utilizing various monetary policy tools to maintain reasonable liquidity in the banking system. The goal is to foster reasonable growth in money and credit while promoting a steady decline in the cost of corporate financing and residents’ credit.
The real estate market in China displayed a stabilization trend in the first half of the year, reflected in the financial data. In this regard, Zou Lan highlighted the importance of implementing policies that are tailored to each city to improve the accuracy of real estate financial policies. Furthermore, the financial management department has extended applicable deadlines in the “Sixteen Financial Articles” to the end of December 2024, facilitating financial institutions to continue providing financing for real estate companies and increasing support for guaranteed delivery buildings.
The People’s Bank of China remains committed to its “housing and housing, not speculation” principle. It will cooperate with relevant departments and local governments to ensure building delivery, people’s livelihood, and stability. The goal is to meet industry’s reasonable financing needs and continue providing financial support to mitigate industry risks, ultimately fostering a favorable financial environment.
In conclusion, the optimization of China’s credit structure in the first half of the year has had a positive impact on the real economy. Through targeted support for key areas and a decline in financing costs, economic development momentum is being enhanced. The People’s Bank of China is determined to maintain a sound monetary policy and implement policies according to the specific needs of each city to ensure accurate financial support and stability in the real estate market.