Speakers:
Mr. Liu Guoqiang, deputy governor of the People's Bank of China (PBC)
Ms. Ruan Jianhong, spokesperson of the PBC and director general of the Statistics and Analysis Department of the PBC
Mr. Zou Lan, director general of the Monetary Policy Department of the PBC
Chairperson:
Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
July 14, 2023
Xing Huina:
Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are joined by Mr. Liu Guoqiang, deputy governor of the People's Bank of China (PBC). Mr. Liu will brief you on China's financial statistics in the first half of 2023 and take your questions. Also joining us today are Ms. Ruan Jianhong, spokesperson of the PBC and director general of the Statistics and Analysis Department of the PBC; and Mr. Zou Lan, director general of the Monetary Policy Department of the PBC.
Now, I will give the floor to Mr. Liu Guoqiang.
Liu Guoqiang:
Friends from the media, good morning. Since the beginning of this year, the PBC has followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and resolutely implemented the decisions of the Central Committee of the Communist Party of China (CPC) and the State Council. It has remained committed to the general principle of pursuing progress while ensuring stability, made prudent monetary policy more targeted and effective, strengthened counter-cyclical regulation, and worked to improve the overall economic performance. Throughout the first half of this year, the financial data saw a notable increase in the first quarter, followed by a slowdown in April and May, and a subsequent rise in June. In general, the financial sector remains stable with reasonably ample liquidity and a constantly improving credit loan structure. The financing costs of the real economy have fallen steadily, and the financial sector's enabling role for economic growth has continued to strengthen.
In terms of the total amount, we have maintained a proper and adequate level of liquidity and stabilized financial support to bolster the real economy. In the first half of this year, the PBC cut the reserve requirement ratio (RRR) for financial institutions by 0.25 percentage point. The move has unleashed long-term liquidity, enhanced the stability and sustainability of the growth of credit loans, and effectively served the real economy. At the end of June, the broad measure of money supply (M2), the existing amount of aggregate financing for the economy, and RMB loans had increased by 11.3%, 9% and 11.3% year on year, respectively. In the first half of the year, the additional amount of aggregate financing for the economy amounted to 21.55 trillion yuan, 475.4 billion yuan more than the previous year; and RMB loans increased by 15.73 trillion yuan, 2.02 trillion yuan more than the previous year.
In terms of structure, the composition of credit loans keeps improving, which has enhanced the growth momentum of economic development. Since the beginning of this year, the PBC has fully leveraged the dual functions of its monetary policy's aggregate and structure. Its structural monetary policy is well focused, reasonably allocated, and properly implemented. The PBC continues to introduce inclusive loans granted to micro and small enterprises (MSEs) and the loan support scheme which ensures the delivery of housing projects. The PBC will keep strengthening support for key areas and weak links in the national economy, including inclusive financing, sci-tech innovation, green development and infrastructure. At the end of June, the balance of medium and long-term loans granted to the manufacturing sector surged 40.3% over the previous year, 29 percentage points higher than the growth rate of various loans; that granted to the infrastructure sector increased by 15.8% year on year, 4.5 percentage points higher than various loans; and that granted to small and medium-sized enterprises (SMEs) that produce new and unique products increased by 20.4% year on year, 9.1 percentage points higher than various loans. The balance of inclusive loans granted to MSEs increased by 26.1% year on year, 14.8 percentage points higher than various loans. The number of entities granted such inclusive loans reached 59.35 million, close to the 60-million-threshold, up 13.3% year on year. In the first half of the year, the total amount of personal housing loans granted increased by 516.4 billion yuan year on year.
In terms of interest rate, the financing costs of the real economy have dropped steadily. In the first half of the year, the PBC kept fine-tuning market-oriented interest rate formation as well as the transmission mechanism for interest rates, and optimized its policy interest rate system. The PBC leveraged the reform effect and guiding role of the loan prime rate (LPR), and lowered the one-year and five-year LPR by 10 base points, which resulted in a steady decline in the costs of enterprises' financing activities and residents' credit loans. In the first half of the year, the weighted average interest rate of newly issued enterprise loans was 3.96%, 25 base points lower than the same period last year; and that of personal housing loans was 4.18%, 107 base points lower than the same period last year.
Moving forward, the PBC will keep implementing a prudent monetary policy in a targeted and effective manner. It will make good use of cross-cyclical adjustments and fully leveraging the effectiveness of monetary and credit policies. The PBC will coordinate efforts to promote the continued improvement in economic performance, consistently enhance the growth momentum, improve public expectations, defuse risks and hidden dangers, and facilitate a positive economic cycle.
Thank you.
Xing Huina:
Thank you, Mr. Liu. Now the floor is open for questions. Please identify the media organization you work for before asking your questions.
