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SCIO press conference on financial performance and foreign exchange receipts and payments data in Q1 2024

Economy
The State Council Information Office held a press conference Thursday in Beijing on development of industry and information technology in the first quarter of 2024.

China.org.cnUpdated:  May 21, 2024

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Speakers: 

Mr. Zhu Hexin, deputy governor of the People's Bank of China (PBC) and administrator of the State Administration of Foreign Exchange (SAFE)

Ms. Wang Chunying, deputy administrator and spokesperson for SAFE

Mr. Zou Lan, director general of the Monetary Policy Department of PBC

Ms. Zhang Wenhong, a person in charge of the Statistics and Analysis Department of PBC

Chairperson:

Ms. Shou Xiaoli, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson for SCIO

Date:

April 18, 2024


Shou Xiaoli:

Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Zhu Hexin, deputy governor of the People's Bank of China (PBC) and administrator of the State Administration of Foreign Exchange (SAFE), and Ms. Wang Chunying, deputy administrator and spokesperson for SAFE, to brief us on China's financial performance and foreign exchange receipts and payments data in the first quarter of 2024, and to also take your questions. Also present today are Mr. Zou Lan, director general of the Monetary Policy Department of PBC, and Ms. Zhang Wenhong, a person in charge of the Statistics and Analysis Department of PBC. 

Now, I'll give the floor to Mr. Zhu for his introduction. 

Zhu Hexin:

Friends from the media, good afternoon. Since the beginning of this year, PBC and SAFE have adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and firmly implemented the guiding principles of the Central Economic Work Conference and the Central Financial Work Conference as well as the deployment of the "two sessions" (the annual gatherings of the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference). We have comprehensively applied various policy tools to support the economic recovery. First, we lowered the required reserve ratio by 0.5 percentage points, and released more than 1 trillion yuan of medium- to long-term liquidity, maintaining a reasonably ample liquidity in the banking system. Second, we appropriately cut interest rates, reducing re-lending and re-discount interest rates for the rural sector and small businesses by 0.25 percentage points . We guided the cut of over-five-year loan prime rate (LPR) by 25 basis points , with the decrease exceeding market expectations. Third, 500 billion yuan of Pledged Supplementary Lending (PSL) was issued, supporting three major projects, namely the construction of government-subsidized housing, the building of dual-use public infrastructure that can accommodate emergency needs and the redevelopment of urban villages. Fourth, we launched a 500-billion-yuan re-lending program for scientific and technological innovation and technological transformation, and fully implemented the decisions and deployments made by the CPC Central Committee and the State Council to advance a new round of large-scale equipment upgrading and consumer goods trade-in programs . Fifth, we promoted stable performance of the foreign exchange market. We adopted comprehensive measures to keep the RMB exchange rate basically stable, and enhanced policy support for foreign exchange facilitation in cross-border trade and investment. In addition, we steadily promoted high-level foreign exchange opening up and facilitated the development and reform of foreign exchange business in banks in an orderly manner. 

As of now, the policies have yielded notable results, mainly reflected in the following aspects. First, the total finance volume has increased steadily. By the end of March, aggregate financing grew by 8.7%, with an addition of 12.9 trillion yuan in the first quarter. The M2, or broad money, increased by 8.3%, with an addition of 12.5 trillion yuan in the first quarter. The balance of RMB loans grew by 9.6%, with an increase of 9.5 trillion yuan in the first quarter. These figures indicate that the financial sector maintains stable support for the real economy. Second, financing costs experienced a steady decline. In the first quarter, the interest rates on new enterprise loans stood at 3.75%, down by 0.22 percentage points year on year. Particularly, the interest rates on new individual housing loans registered 3.71%, down by 0.46 percentage points year on year. Third, the credit structure continued to improve. By the end of March, loans provided by financial institutions to high-tech manufacturing industries, inclusive loans to micro and small businesses, loans to the rural sector and loans to the private sector grew by 27.3%, 20.3%, 13.5%, and 10.7% year on year, respectively. These rates were all significantly higher than the overall loan growth rate of 9.6%. Fourth, credit maintained a steady pace. In the first quarter of 2023, financial institutions exhibited rapid loan issuance. However, efforts have been made since the second half of last year to guide a balanced distribution of credit, easing the phenomenon of financial institutions rushing to meet deadlines. In the first quarter of this year, the proportion of loan issuance was returning to the historical average level, ensuring ample room for credit growth in the next three quarters. Fifth, the foreign exchange market demonstrated strong resilience. There is considerable focus on the steady increase of RMB against a basket of currencies, with the RMB exchange being stable relative to other global currencies. Additionally, cross-border capital flows were generally balanced, and foreign exchange reserves were generally stable. 

Overall, a series of monetary policies introduced earlier are gradually taking effect, leading to a sustained recovery and a good start for the national economy. There is still room for monetary policy adjustment in the future. We will closely monitor the effects of these policies as well as the progress of economic recovery and goal attainment, thereby judiciously utilizing reserve tools as opportunities arise. 

Ms. Wang will brief you on specific data regarding foreign exchange receipts and payments in the first quarter of this year.

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