CNBC: 

The decline in social financing at the beginning of the year has raised concern among analysts about weak demand. What is the PBC's view of this? Thank you.

Zhang Wenhong:

I will answer this question. Thank you for your question. As Mr. Zhu mentioned earlier, aggregate financing stood at 390.32 trillion yuan by the end of March, representing an 8.7% increase year on year. This growth rate was 0.3 percentage points lower than the end of previous month. Social financing in the first quarter increased by 12.93 trillion yuan, 1.61 trillion yuan lower than the same period in 2023, primarily due to a high base last year. However, looking at data from the same period in previous years, the increase in social financing in the first quarter of this year was still at a relatively high level. From a structural perspective, there are four main features:

First, credit supply remained steady, with financial institutions maintaining a reasonable growth in RMB loans issuance to the real economy. In the first quarter, RMB loans issued by financial institutions to the real economy increased by 9.11 trillion yuan, which was 1.59 trillion yuan less than in 2023, but 773 billion yuan more than in 2022.

Second, financing through issuance of government bonds remained at a reasonable scale. In the first quarter, net financing through issuance of government bonds reached 1.36 trillion yuan. Although the increase narrowed slightly compared with the previous year, it was roughly in line with the average for the same period from 2020 to 2023.

Third, debt financing by enterprises experienced growth. In the first quarter, net debt financing by enterprises was 1.12 trillion yuan, up by 255.1 billion yuan year on year.

Fourth, off-balance-sheet financing, such as trust loans and undiscounted bankers' acceptance bills, also increased year on year. In the first quarter, trust loans and undiscounted bankers' acceptance bills increased by 198.3 billion yuan and 550 billion yuan, respectively, with respective year-on-year growth of 202.4 billion yuan and 81.4 billion yuan.

Overall, the social financing scale growth in the first quarter basically aligned with this year's projected economic growth and CPI increase. Achieving a growth rate of 8.7% on a high base from last year was actually quite robust. Moreover, this year, the PBC has emphasized guiding financial institutions to ensure balanced credit growth. Although there was a slight year-on-year decline in the first quarter in the increase of aggregate financing, it was still at a relatively high historical level, which has bolstered the real economy while enhancing the sustainability of credit growth by avoiding a lack of momentum at excessively high levels. Thank you.