CCTV:

At the end of last year, the Central Economic Work Conference required a prudent monetary policy that is flexible, precise, reasonable and appropriate. What direction will the monetary policy take in the second half of 2021? What will be the difference compared to the first half? Thank you. 

Sun Guofeng:

This year, the prudent monetary policy has been flexible, precise, reasonable, and appropriate, emphasized stability, and provided strong support for the real economy, achieving good results. 

First, the supply of money and credit and aggregate financing grew reasonably. At the end of June, the M2 money supply increased by 8.6% year-on-year. Aggregate financing grew by 11%. In the first six months, new RMB loans totaled 12.76 trillion yuan, an increase of 667.7 billion yuan compared to the same period last year, providing strong support for the real economy. 

Second, precise support was provided to key sectors and weak links such as small and micro enterprises and manufacturing. At the end of June, the outstanding balance of all-inclusive loans of small and micro businesses increased by 31% compared with the same period last year, up by 0.7 percentage point from the end of last year; the number of market entities supported by all-inclusive loans of micro and small businesses was 38.3 million, up by 29.2% compared with the same period last year; medium- and long-term loans to manufacturers increased by 41.6% compared with the same period last year, increasing by over 40% for four consecutive months. 

Third, overall financing costs have steadily dropped. The interest rate of business loans from January to June was 4.63%, down 0.16 percentage point compared to the figure of the previous year. The weighted average interest rate of inclusive finance lending to micro and small businesses was 4.93% in May, down 0.15 percentage point compared with last December. Currently, China's economy has maintained the momentum of stable and sound development, and overall price trends are under control. During our response to the pandemic last year, we persevered in implementing normal monetary policies, and the intensity gradually returned to normal after May 2020, and by the first half of this year had almost returned to its normal pre-pandemic state. China has been leading the world in macro policies. 

Next, the PBC will make stability a top priority, giving prominence to domestic situation and implementing policies with proper intensity and pace mainly according to economic situation and price trends at home. We will take into consideration the balanced domestic and external development and give better support to the real economy, creating an appropriate monetary and financial environment for the high-quality economic development. In terms of aggregate, the PBC will ensure that money supply and aggregate financing are generally in step with economic growth in nominal terms. In terms of structure, the PBC will support the green development and scientific and technological innovation of small and medium enterprises. In terms of prices, the PBC will consolidate the outcomes of lower loan interest rates in real terms and ensure that overall financing costs steadily drop. Thank you.