Financial support for the economy continues to strengthen (New Economic Direction · Mid year Data Observation) Structure | Finance | Economy

On July 14th, the State Council Information Office held a press conference to introduce the financial statistical data for the first half of this year. Liu Guoqiang, Vice President of the People's Bank of China, stated at a press conference that since the beginning of this year, the People's Bank of China has adhered to the overall tone of seeking progress while maintaining stability, implemented precise and effective prudent monetary policies, increased countercyclical adjustment efforts, and continuously strengthened financial support for the economy, promoting overall improvement in economic operation.

Continuous optimization of credit structure and stable support for the real economy

"In the first half of the year, the People's Bank of China lowered the reserve requirement by 0.25 percentage points, released long-term liquidity, enhanced the stability and sustainability of total credit growth, and effectively served the real economy," Liu Guoqiang said.

The data shows that China's liquidity is reasonable and abundant, stabilizing its support for the real economy. At the end of June, the broad money supply, social financing scale stock, and various RMB loans increased by 11.3%, 9.0%, and 11.3% year-on-year, respectively. In the first half of the year, the increase in social financing scale was 21.55 trillion yuan, an increase of 475.4 billion yuan year-on-year; RMB loans increased by 15.73 trillion yuan, an increase of 2.02 trillion yuan compared to the same period last year.

At the same time, the People's Bank of China fully utilizes the dual functions of both the total quantity and structure of monetary policy tools. Structural monetary policy tools focus on key areas, are reasonable and moderate, and have both progress and retreat. It continues to increase support for key areas and weak links of the national economy such as inclusive finance, technological innovation, green development, and infrastructure, and continuously optimizes the credit structure.

According to Ruan Jianhong, Director of the Investigation and Statistics Department of the People's Bank of China, from the perspective of industry investment, new loans are mainly invested in key areas such as manufacturing and infrastructure. The growth rate of medium and long-term loans in the manufacturing industry remains at a relatively high level. At the end of June, the year-on-year growth rate of medium and long-term loans in the manufacturing industry was 40.3%, 10.7 percentage points higher than the same period last year. Among them, medium and long-term loans in high-tech manufacturing industry increased by 41.5% year-on-year, 11.5 percentage points higher than the same period last year. The growth of medium - and long-term loans in the infrastructure industry is relatively fast. At the end of June, medium - and long-term loans in the infrastructure industry increased by 15.8% year-on-year, 3.3 percentage points higher than the same period last year.

Strengthen precise support for private small and micro enterprises and technological innovation

"The People's Bank of China has adopted various policy support tools to fully support the development of small and micro enterprises and private enterprises." Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, introduced that the People's Bank of China has continued to increase its support for re lending, increasing the amount of re lending and rediscounting for agriculture and small enterprises by 200 billion yuan on June 30th.

At the same time, we will continue to make full use of the support tools for inclusive small and micro loans, and have provided a total of 39.8 billion yuan in funds to local corporate financial institutions, supporting an increase of 2.2 trillion yuan in inclusive small and micro loans. Recently, the implementation period of the People's Bank of China's inclusive small and micro loan support tool has been extended from the end of June this year to the end of 2024, continuing to incentivize banks to provide financing support for small and micro enterprises.

With the support of various policies, small and micro enterprises and private enterprises have achieved "quantity increase, area expansion, and price reduction" in financing. At the end of June, the balance of inclusive small and micro loans was 27.7 trillion yuan, a year-on-year increase of 26%. The number of inclusive small and micro credit households was 59.35 million, a year-on-year increase of 13.3%; The weighted average interest rate for newly issued inclusive small and micro enterprise loans in May was 4.57%, which is at a historically low level.

Technology oriented enterprises are also a key focus of financial support. Since the beginning of this year, loans to technology-based enterprises in China have maintained rapid growth, and the quality and efficiency of services have significantly improved. As of the end of June, the balance of loans for "specialized, refined, special, and new" small and medium-sized enterprises in China was 2.72 trillion yuan, an increase of 459.8 billion yuan compared to the same period last year, maintaining a growth rate of over 20% for 14 consecutive months; The balance of loans for technology-based small and medium-sized enterprises was 2.36 trillion yuan, an increase of 472.7 billion yuan compared to the same period last year, with a growth rate of 25.1%.

"The People's Bank of China will further enrich financial instruments, develop financial markets, improve supporting policies, promote more investment of financial resources in technology-based enterprises, and provide more accurate, high-quality, and efficient financial services for technology-based enterprises." Liu Guoqiang introduced.

There will be no risk of deflation in the second half of the year, and we are confident in maintaining the stable operation of the foreign exchange market

Liu Guoqiang stated that in recent months, prices in China have shown a downward trend, but there has been no deflation. China's macroeconomic situation has steadily recovered, and M2 has maintained rapid growth, which is significantly different from the typical deflation in history. Liu Guoqiang predicts that there will be no risk of deflation in the second half of the year. He stated that China's monetary conditions are reasonable and moderate, and residents have stable expectations. With the continuous manifestation of policy effects, the supply-demand gap will be further bridged. After August, CPI is expected to gradually rise, and the overall trend of CPI is expected to be U-shaped throughout the year. Price levels will first decrease and then rise within the year.

The RMB exchange rate has fluctuated recently. The RMB exchange rate has not deviated from the fundamentals, and the People's Bank of China has taken comprehensive measures to manage expectations. The foreign exchange market is operating steadily, and the foreign exchange settlement and sales behavior of financial institutions, enterprises, and residents is rational and orderly. Market expectations are basically stable.

From the macroeconomic perspective, the fundamentals of China's long-term economic growth have not changed. From the perspective of the overall international balance of payments, China's current account surplus remains at a moderate level of around 2%, and cross-border capital flows are basically balanced. From the perspective of the reserve market, China has sufficient foreign exchange reserves and its balance still ranks first in the world.

"Overall, with the support of these 'three major markets', under the market-oriented exchange rate formation mechanism, the RMB exchange rate will not have a' unilateral market ', but will still maintain two-way fluctuations and dynamic equilibrium. We have confidence, conditions, and ability to cope with various shocks and maintain the stable operation of the foreign exchange market." Liu Guoqiang said.

Journalist's Notes

Improving the quality and efficiency of financial services for the real economy

The semi annual report of financial data shows that the quality and efficiency of financial services for the real economy continue to improve.

The improvement is reflected in the statistics. The total amount of credit has increased, the credit structure continues to optimize, and the financial support for the real economy has increased.

Improvement is also reflected in the sense of achievement of the business entity. In Zhejiang, Hubei, Guangdong and other places, small and micro enterprises can use accounts receivable, prepayments, inventory, warehouse receipts, intellectual property rights, etc. as collateral, and quickly obtain loans through online and automated approval; Technology oriented enterprises enjoy preferential interest rates, which provide more motivation for transformation, upgrading, and research and development innovation. The availability and convenience of financial services have significantly improved.

The improvement is also reflected in the enthusiasm of financial institutions to be willing to lend, willing to lend, able to lend, and able to lend. The People's Bank of China guides financial institutions to increase their support for key areas and weak links of the national economy, such as inclusive finance, technological innovation, and green development, through various monetary policy tools.

Currently, the international environment is complex and severe, and the constraints of insufficient domestic demand still exist. High quality economic development still faces many difficulties and challenges. But we believe that with the continued precise and effective implementation of a prudent monetary policy, there is sufficient policy space to address unexpected challenges and changes, and the further flow of financial "blood" can continuously strengthen the "bones" of the real economy.