Yicai:

What are the highlights of aggregate social financing and money supply in the first half of this year? And what are the characteristics of credit supply in terms of both total amount and structure? Thank you.

Zou Lan:

Thank you for your questions. I would like to invite Mr. Yan to answer these questions.

Yan Xiandong:

Thank you for your questions. Since the beginning of this year, in accordance with the decisions and plans of the CPC Central Committee and the State Council, the PBOC has earnestly implemented the guiding principles of the Central Economic Work Conference and the requirements of the Government Work Report. The PBOC has continued to implement a moderately loose monetary policy, maintained adequate liquidity at a proper level, and ensured that aggregate financing and money supply stay in step with the projected economic growth and CPI increase.

Looking at data from the first half of the year, the financial aggregates have witnessed steady growth, with stronger support for the real economy. By the end of June, China's outstanding social financing was 462.06 trillion yuan, up 7.4% year on year; the balance of the M2 money supply reached 356.71 trillion yuan, up 8% year on year; and outstanding RMB loans extended by financial institutions was 282.63 trillion yuan, up 5.2% year on year.

With reasonable growth in aggregate financing to the real economy (AFRE), the financial systems have adequately met the funding needs of the real economy. In the first half of this year, the increment of aggregate social financing reached 20.84 trillion yuan. In terms of the structure, first, financial institutions' credit support for the real economy has remained stable. In the first half of the year, RMB loans issued by financial institutions to the real economy after deducting repayments saw a net increase of 10.76 trillion yuan. Second, direct financing for enterprises increased significantly year on year, with its proportion climbing noticeably. In the first half of the year, net financing of non-financial corporate bonds reached 2.07 trillion yuan, an increase of 916.7 billion yuan year on year; and equity financing by non-financial enterprises reached 293.3 billion yuan, up 122.4 billion yuan year on year. Together, they accounted for 11.3% of the AFRE, which was 5.6 percentage points higher than the same period last year. Third, the financial system has actively cooperated with fiscal policies, with net financing of government bonds remaining at a relatively high level. In the first half of the year, net financing of government bonds stood at 6.44 trillion yuan. Net financing of treasury bonds amounted to 2.69 trillion yuan; and net financing of local government special bonds amounted to 3.44 trillion yuan. Fourth, off-balance-sheet financing has declined. In the first half of the year, trust loans, entrusted loans and undiscounted bankers' acceptances decreased by a total of 249 billion yuan, down by 286.2 billion yuan compared to the same period last year.

The financial system has maintained a high level of credit support for the real economy, and its structure has continued to improve. In terms of borrowers, loans extended to enterprises and public institutions constitute the main driver of credit growth. In the first half of the year, loans extended to enterprises and public institutions increased by 11.13 trillion yuan, with medium and long-term loans increasing by 5.55 trillion yuan, indicating that the financial sector continued to provide sustained and stable funding support for the real economy. Operating loans for households increased by 689 billion yuan, showing that financial institutions continued to increase financial support for the production and operation activities of self-employed individuals and small- and micro-business owners. In terms of the loan allocation structure, loans have flowed into key areas and weak links. At the end of June, outstanding inclusive loans to micro and small businesses increased by 8.3% year on year; outstanding MLT industrial sector loans increased by 5.9% year on year; and outstanding MLT service sector loans, excluding property sector loans, increased by 9.2% year on year. The growth rates of all three categories outpaced that of the total loans over the same period.

In the next stage, the PBOC will continue to implement the decisions and plans of the CPC Central Committee and the State Council, adopt more proactive and effective macro policies, make policies more forward-looking, flexible and targeted, make comprehensive use of various policy tools, smooth the monetary policy transmission mechanism, and guide financial institutions to increase support for key areas, thereby providing sound financial support for the real economy. Thank you.