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Read in Chinese

Speakers:

Ruan Jianhong, spokesperson of the People's Bank of China (PBC) and director general of the statistics and analysis department at the PBC

Sun Guofeng, director general of the monetary policy department at the PBC

Zou Lan, director general of the financial market department at the PBC

Chairperson:

Chen Wenjun, head of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 13, 2021

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Chen Wenjun:

Ladies and gentlemen, good afternoon. Welcome to this press conference about China's first-half financial statistics of 2021. We are delighted to invite Ms. Ruan Jianhong, spokesperson of the People's Bank of China (PBC) and director general of the statistics and analysis department at the PBC; Mr. Sun Guofeng, director general of the monetary policy department at the PBC; and Mr. Zou Lan, director general of the financial market department at the PBC, to meet with you to introduce the financial statistics and answer your questions.

Now, I give the floor to Ms. Ruan.

Ruan Hongjian:

Friends from the media, good afternoon. Since 2021, the PBC has resolutely implemented the deployments of the CPC Central Committee and the State Council; adopted a prudent monetary policy that is accurate, flexible, proper, and stable; maintained reasonable and ample liquidity; reduced the required reserve ratio; optimized the funding structure of financial institutions; and given full play to the targeted guiding role of structural monetary instruments such as refinancing, rediscount, and direct tools. We have continued to release the dividends of LPR reform, kept the increases in money supply and aggregate financing generally in step with economic growth in nominal terms, maintained the macro-leverage ratio basically stable, and built support for key areas and weaknesses in the real economy. 

First, total financial resources have grown appropriately and maintained reasonable and ample liquidity. In 2021, the financial system consolidated its achievements in coordinating epidemic control with economic and social development. We have put the real economy in a more prominent position, and the total financial resources increased appropriately. RMB loans for the first half of the year increased by 12.76 trillion yuan, a year-on-year increase of 667.7 billion yuan. The balance of the M2 money supply was 231.78 trillion yuan, an increase of 8.6% year-on-year and 0.3 percentage points higher than at the end of the previous month. The balance of aggregate financing was 301.56 trillion yuan, an increase of 11% year-on-year, and the same as seen at the end of the previous month. The growth rate of M2 and aggregate financing were generally in step with economic growth in nominal terms.

Second, significant results have been achieved in maintaining the basic stability of the macro-leverage ratio. In the first half of the year, the overall national economy continued to recover stably and the order of production and life was steadily restored, providing a basic guarantee for the stability of the macro-leverage ratio. In the first quarter of 2021, China's macro-leverage ratio was 276.8%, 2.6 percentage points lower than at the end of the previous year. The leverage ratios of non-financial enterprises, government departments, and households declined by 0.9, 1.3, and 0.4 percentage points, respectively, all of which fell by varying degrees. Judging from the economic recovery and debt growth in the second quarter, we expect the macro-leverage ratio to remain stable in the second quarter.

Third, the overall financing cost of the real economy has steadily decreased. Since the beginning of the year, the PBC has continued to improve the market-based interest rate formation and transmission mechanism and the PBC's policy interest rate system, optimize supervision over deposit interest rates, release the potential for LPR reform, and promote further reductions in actual loan interest rates. Meanwhile, two monetary policy tools directly concerning the real economy were also leveraged to reduce the financing costs of micro and small enterprises. In the first half of the year, the contract interest rate of new loans issued to micro and small enterprises was 5.18%, down by 0.3 and 1.06 percentage points than during the same period in 2020 and 2019. The contract interest rate for manufacturing loans was 4.13%, down by 0.25 percentage points, compared to the same period last year. In addition, the universal RRR cut has reduced capital costs among financial institutions by about 13 billion yuan per year, and transmission through financial institutions has promoted the reduction of overall financing costs.

Fourth, the financial sector has bolstered support for high-quality development. The financial system has implemented an innovative, coordinated, green, open, and shared development philosophy and built on the new development paradigm to promote high-quality economic development and increased support for technological innovation. As of the end of May, the rate of obtaining loan for small and medium sci-tech enterprises were 41.8%, while the loan balance increased by 8.75% over the beginning of the year, and the development of green finance was solidly promoted. We have improved the green financial standard system, established a climate and environmental information disclosure system, and encouraged the financial sector to increase support for green industries. We have also continued to develop inclusive finance. At the end of June, the balance of inclusive loans for micro and small firms reached 17.7 trillion yuan, a year-on-year increase of 31% and 18.7 percentage points higher than the growth rate of various loans in the same period. At the end of June, 38.3 million micro and small firms had received inclusive loans, a year-on-year increase of 29.2%.

Fifth, we have effectively controlled financial risks in key areas. By the end of the first quarter, the shadow banking assets, non-standard credit assets, and non-standard capital in the financial system dropped by about one-fifth, one-fourth, and one-fifth, respectively, compared to historical records. We have been exploring risk control mechanisms in small- and medium-sized financial institutions, and made progress in installing risk control mechanisms in small- and medium-sized financial institutions with high risks. We are also improving and establishing long-term financial regulation mechanisms for the real estate sector with a focus on stabilizing land prices, property prices, and people's expectations.

To sum up, the finance sector has been progressing smoothly with continued improvement in its structure. In the next step, the PBC will conscientiously implement the principles of the fifth plenary session of the 19th CPC Central Committee as well as the Central Economic Work Conference, uphold the underlying principle of pursuing progress while ensuring stability, keep a prudent monetary policy that is consistent, stable, and sustainable. We will deepen structural supply-side reforms in the finance sector, increase financial support for key sectors such as the private sector, small- and micro-businesses, rural vitalization, and green and low-carbon. We will continue to improve the adaptability and inclusiveness of the financial system and financial services and make contributions to reaching the second centenary goal.

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Chen Wenjun:

Thank you, Ms. Ruan. The floor is now open to questions. Please identify the news organizations you represent before raising questions.

China Securities Journal:

What are the structural features of total social financing (TSF) in the first half of the year? How will they change in the second half of the year? Thank you.

Ruan Jianhong:

The TSF grew by 17.74 trillion yuan in the first half of the year, a drop of 3.13 trillion yuan year-on-year, but a 3.12 trillion yuan increase than the same period in 2019. At the end of June, the growth rate of TSF was 11%, leveling the same period in May, and was consistent with the nominal GDP growth. Therefore, our financial support toward the real economy is consistent with the overall economic growth.

Let's take a look at the TSF structure. We can see from the statistics that the structure shows some signs of divergence, which may affect our impression on the overall scale. Two reasons have contributed to the decelerated growth or accelerated decline compared to last year. The first is that shrinking shadow banking assets have led to a drop in off-balance-sheet financing. In the first half of the year, off-balance-sheet financing, including entrusted loans, trust loans, and undiscounted bankers' acceptances, declined by 843.6 billion yuan, a drop of 869.9 billion yuan year-on-year. Second, compared to last year's expanded government and corporate bonds to offset the impact of COVID-19 on the economy, this year's bond issuance has been normalized. At the same time, the reason for an accelerated growth in TSF compared to 2019 is the rise in RMB-denominated loans and stock financing. Specifically, RMB loans rose by 613.5 billion yuan in the first half of the year compared to the same period last year. In comparison, stock financing by non-financial companies reached 495.5 billion yuan, up by 249.4 billion yuan year-on-year.

In the second half of this year, we will continue to implement prudent monetary policies that are flexible, precise, reasonable, and moderate and will serve the development of the real economy. We expect the TSF to grow steadily and consistently with the nominal GDP growth. Thank you.

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Thecover.cn:

In the financial statistics of the first half of the year, we noticed that RMB loans have increased by 12.76 trillion yuan, up by 667.7 billion yuan year-on-year. Loans to enterprises and public institutions increased by 8.37 trillion yuan. What's your opinion on the scale of loans to those enterprises? What will PBC do to further increase financial support to the real economy. Thank you.

Ruan Jianhong:

The RMB loans increased by 12.76 trillion yuan in the first half of the year, up by 667.7 billion yuan. In the end of June, the growth rate of RMB loans was 12.3%, up by 0.1 percentage points month-on-month and a decrease of 0.9 percentage points year-on-year, representing a steady growth over the high baseline last year. This year, our credit policy continues to serve the real economy, providing powerful support for high-quality economic growth.

You mentioned that loans to enterprises and public institutions rose by 8.37 trillion yuan in the first half of the year, down by 402.1 billion yuan. Specifically, short-term loans increased by 1.23 trillion yuan, a drop of 1.6 trillion yuan year-on-year, representing that the liquidity demand for businesses is returning to normal. At the same time, medium- and long-term loans increased by 6.62 trillion yuan, up by 1.77 trillion yuan year-on-year, indicating that financial institutions have provided strong support for the medium- and long-term investment in businesses.

According to the structure of medium- and long-term investment, the financial sector has provided steady and strong support to manufacturing, infrastructure, and the service industry (not including real estate). The structure of credit supply has continued to improve. 

Medium- and long-term loans to manufacturers increased rapidly. At the end of June, the outstanding balance of medium- and long-term loans to manufacturers grew by 41.6% year-on-year, up by 16.9 percentage points from the same period last year, and 24.8 percentage points higher than that of all industries, increasing by more than 40% for the fourth straight month. Specifically, medium- and long-term loans to high-tech manufacturers increased by 46.3%, continuing a relatively high growth rate. 

Medium- and long-term loans to the infrastructure industry also increased rapidly. At the end of June, the outstanding balance of medium- and long-term loans to the infrastructure industry increased by 17.3% year-on-year, up 5.4 percentage points from the same period last year. In the first half of the year, medium- and long-term loans to infrastructure increased by 2.49 trillion yuan, up by 967.4 billion yuan year-on-year. 

Support for the service industry (not including real estate) continued to grow. At the end of June, medium- and long-term loans to the industry grew by 19.1% year-on-year, 2.3 percentage points higher than that of all industries. Thank you. 

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Economic Daily:

Micro, small and medium enterprises (MSMEs) have played an important role in promoting economic growth and stabilizing employment. In recent years, the PBC has rolled out a series of measures. What have been the results of these measures? What other innovative measures will be adopted to further support the development of MSMEs? Thank you. 

Zou Lan: 

This year, the PBC has firmly implemented the arrangements and decisions of the CPC Central Committee and the State Council to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and maintain security in the six areas (residential employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations). We have adhered to the principles of adopting long- and short-term policies and have addressed both the symptoms and root causes in order to improve financial services for market entities such as small and micro enterprises. We have made achievements in the following aspects. 

First, the financing of small and micro enterprises saw an increase in amount and scope and a decrease in cost. At the end of June, the outstanding balance of loans to small and micro businesses under inclusive financial services, as introduced by Ms. Ruan, amounted to 17.7 trillion yuan, increasing 31% year-on-year. A total of 38.3 million small and micro businesses were supported, increasing by 29.2% year-on-year. In May, the interest rate of loans to small and micro businesses with single-client credit lines under 10 million yuan was 4.93%, down by 0.3 percentage point year-on-year. 

Second, the two monetary policy instruments that can directly stimulate the real economy exerted remarkable effects. From 2020 to May of 2021, the financial institutes in the banking industry have postponed principal and interest repayments across China on 10.9 trillion yuan of loans and issued 6.3 trillion yuan in credit loans to small and micro businesses under inclusive finance services. 

Third, support for enterprises in key industries has been further expanded. By the end of May, a key enterprise database, including 383,000 key enterprises across China, was established. The financial institutes have provided loans of 7 trillion yuan to 180,000 enterprises, creating about 30 million jobs. 

Besides, in terms of reducing fees and making interest concessions, since this year, the PBC has been unleashing dividends of the LPR reform, improving supervision on deposit interest rates, and reducing the costs of debt for banks. We have launched 12 measures to cut fees for five categories of services, namely bank account services, RMB settlements, e-banking, bankcard use, and payment account services. We have decreased service charges for cash withdrawals across ATMs of different banks with the China Banking and Insurance Regulatory Commission. According to our estimates, annual service charge reductions following implementation of the measures will amount to 24 billion yuan, of which over 16 billion will be saved among small and micro enterprises and self-employed workers. In the first six months, the average interest rate in enterprise contracts was 4.41%, down by 0.28 percentage point year-on-year. In general, the financial system has intensified support for the real economy and made financing more convenient for enterprises; total financing costs decreased while ensuring stability. 

For the next step, the PBC will ensure the continuity and stability of policies and carry out the program to improve financial services for MSMEs. We will also introduce a specialized program themed “providing loans for small businesses, improving people's well-being” to scale up financial support for self-employed workers. We will continue to improve financial services for small and micro enterprises and other market entities. Thank you. 

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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.

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Nihon Keizai Shimbun:

Since the autumn of 2020, the PBC has expanded trials of the digital RMB. Last week, a vice-governor of the PBC mentioned that the number of selected users in the trial had reached 10 million. Up to now, how does the PBC assess the effectiveness of the trial? Thank you. 

Ruan Jianhong:

I will answer this question. In 2019, the digital currency trial was launched in the cities of Shenzhen, Suzhou and Chengdu, Xiongan New Area and Beijing 2022 Winter Olympic Games venues. In October 2020, the trial expanded to the cities of Shanghai, Changsha, Xi'an, Qingdao and Dalian, and Hainan province. The selection of participants in the digital RMB R&D pilot is based on major national development strategies, the coordinated regional development strategy, and the characteristics of local industries and economies. At present, the pilot provinces and cities cover the Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei region, central, western, northeast, and northwest China, which are broadly representative and conducive to testing and assessing promising prospects of the digital RMB in different regions. 

The trial of the digital RMB follows the principle of stability, safety, and controllability, focusing on small and retail payments for some selected groups of users. During the trial, various sectors have shown a keen interest in the digital RMB, and users in the pilot areas are very active. The testing scenarios have included living costs, catering services, transportation, shopping, and government services. The digital RMB pilot programs are expanding in an orderly manner, with a gradual increase in application scenarios and innovations in application modes. The system is in a stable operation overall. Thank you. 

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China Daily:

My question is about the achievements of financial measures for targeted poverty alleviation. How can we ensure that financial support can consolidate and expand the achievements in poverty alleviation and advance rural vitalization? Thank you. 

Zou Lan: 

Thanks for your question. In recent years, the PBC implemented the decisions and deployments of the CPC Central Committee and the State Council, improved the policy system and organizational system of financial measures for targeted poverty alleviation, and encouraged the financial sector to increase support to poverty-stricken areas. Since the battle against poverty, micro credit provided to the poor amounted to more than 710 billion yuan; poverty alleviation re-lending totaled 668.8 billion yuan; and targeted loans for poverty alleviation reached 9.2 trillion yuan, giving strong support to the complete victory in the battle against poverty. 

As of this year, the PBC also introduced a number of policies and measures and made solid efforts to make sure that financial support can consolidate and expand the achievements in poverty alleviation so as to help achieve rural vitalization. 

First, this includes strengthening top-level design. In June, the PBC issued opinions on financial support for consolidating achievements in poverty alleviation and comprehensively advancing rural vitalization, which adjusted and improved financial assistance policies. The PBC also introduced measures on appraisals and evaluations for financial institutions serving rural vitalization, stressing the incentive role of assessment and guiding more financial resources to be invested in the areas relating to agriculture, rural areas and the wellbeing of farmers. As of the end of June, the loans to agriculture, rural areas and farmers totaled 41.66 trillion yuan, up 10.1% year on year. 

Second, by giving full play to the guiding role of monetary policy tools. The PBC issued a notice to further give full play to the stimulating and guiding role of re-lending, saying that poverty alleviation re-lending can be extended in accordance with regulations. It also guides financial institutions to expand credit supply for rural vitalization by using monetary policy tools such as re-lending to agriculture, rural areas and farmers and small businesses. 

Third, by increasing support in key areas. In May, the PBC took the lead in issuing opinions on extending financial support for the development of new types of agribusinesses to promote the integrated development of primary, secondary, and tertiary industries in rural areas. 

Next, the PBC will promote the implementation of the measures that have already been introduced, focus on key areas such as key counties assisted in the country's rural vitalization drive, and increase financial support for them. We will ensure financial services for new-type agricultural business entities and strengthen financial support for food security, seed industry development, and other fields. We will also work hard to ensure risk prevention and strive to form a long-term, effective mechanism for financial support for rural vitalization. Thank you.

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Phoenix TV:

We noticed that the year-on-year increase of PPI in June dropped by 0.2 percentage points from May to 8.8%, but it remained running at a high level. What do you project for the next PPI trend? Do you think this decrease will continue and, on the basis of the recent comprehensive RRR cut, is there any need for further RRR cuts or even interest rate cuts in the future? Thank you.

Sun Guofeng:

Recently, China's PPI has risen rapidly. This is due to the low base factor of the negative growth of PPI caused by the impact of the epidemic in the same period last year, as well as the imported impact of rising international bulk commodity prices. This year's phased increase in PPI should be viewed objectively. On the one hand, this is a high reading based on last year's low base. In this regard, we can use the overall perspective of three consecutive years - last year, this year, and next year - to observe the changes in PPI. On the other hand, historically, the PPI indicator itself has relatively large fluctuations, so it is not uncommon to see peaks and troughs over a period of a few months. Generally speaking, the rise of China's PPI is temporary, and it may remain relatively high in the second and third quarters of this year. But, with the gradual decline of the base effect and the weakening of the imported impact brought about by the recovery of global supply, PPI is expected to decline in the fourth quarter of this year and into next year.

The recent RRR cut is a regular liquidity operation after the monetary policy returned to normal, and the stance of prudent monetary policy has not changed. Thank you.

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South China Morning Post:

Regarding the RRR cut, with the U.S. Federal Reserve has hinted a signal of policy tightening, is the central bank worried about the risks brought about by the differentiation of China's and the US' monetary policies, including RMB depreciation or capital outflow? What measures will be taken to handle these risks? Thank you.

Sun Guofeng:

Since 2020, China has always adhered to and implemented a prudent monetary policy, which not only strongly supports the real economy but also refrains from resorting to a deluge of strong stimulus policies. At the same time, in the light of the domestic epidemic prevention and control and the economic and financial situation, we have appropriately adjusted the intensity and pace of the policies. From February to April last year, due to the severe impact of the epidemic on the domestic economy, the monetary policy response was relatively large. Since May last year, the intensity of monetary policy has gradually stabilized. In the first half of this year, it has basically returned to the normal state before the epidemic, maintaining a leading position in global macro policies.

In the context of global economic integration, the economy and finance of various economies have mutual effects on one another. However, due to differences caused by their various states of epidemic prevention and control and economic recoveries, it is normal that the U.S. and China have different operations of their monetary policy. Currently, China's economy is stable and improving, and the stance of prudent monetary policy has not changed. The RRR cut is mainly in place to optimize the capital structure of financial institutions, improve financial service capabilities, and better support the real economy.

In the next stage, the monetary policy will focus on the domestic situations and prioritize stability. We will stick to a normal monetary policy, and maintain monetary policy independence. We will adjust the intensity and pace of our policies in the light of the domestic economic situation and price trends, take into account internal and external balances, and strongly support the real economy. At the same time, we will also pay close attention to the changes in the international economic and financial situations, taking ourselves as the mainstay and carry out international macro policy coordination to jointly foster a positive environment in order to promote the stable recovery of the global economy. Thank you.

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CNBC:

I have two questions. The first question is about consumer loans: what can you tell us about the different types of consumer loans, especially in the context of varying consumer income? The second question is about non-performing assets: some recently published analyses and reports indicate that there are relatively large gaps in non-performing assets of banks across different regions. Has the central bank conducted research on this issue, and what risks need to be considered to protect the national financial system? Thank you.

Ruan Jianhong:

Let me answer your second question first. The statistics of non-performing assets are released by the supervisory authorities, so you can stay tuned with them for information updates.

Zou Lan:

In recent years, China's consumer loans have grown steadily, which is basically consistent with the growth trend of household consumption. At the end of June, the balance of RMB personal consumption loans increased by 13% year on year. Among them, short-term consumer loans increased by 11.1% and medium- and long-term consumer loans increased by 13.4%. With the economic and social development and the improvement of people's living standards, there is still much room for improvement in household consumption. The PBC will actively guide commercial banks to conduct consumer finance businesses in a prudent and standardized manner and strengthen the management of consumer loan use, giving full play to the positive role of consumer finance in supporting upgrades in household consumption and promoting "dual circulation." Thank you. 

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Bloomberg:

I have two questions. First, will green finance re-lending be the new monetary policy tool to support the decarbonization policy? Second, how is the PBC preparing to handle the external shocks and also the impact of the Fed's policy tightening in the future? Thank you.

Sun Guofeng:

I will first answer your question regarding our tools to support carbon emission reduction. To implement the policy decisions and plans made by the CPC Central Committee and the State Council on accelerating green and low-carbon development and solidly carrying out work to achieve carbon peak and neutrality goals, the PBC is now working in an orderly manner to set up tools to support carbon emission reduction in accordance with the government work report and the requirements of the State Council executive meetings. The tools will provide targeted and direct support to the development of clean energy, energy conservation, environmental protection, and carbon emission reduction technologies, and will encourage more social funds to promote carbon emission reduction. As structural monetary policy tools that can provide direct support to the real economy, our tools will provide eligible financial institutions with low-cost funds and encourage them to offer financing at preferential interest rates for key projects with significant effects in carbon emission reduction.

The tools to support carbon emission reduction are being devised under the principles of marketisation, the rule of law and internationalization, and fully demonstrate openness and transparency. The tools are feasible, computable and verifiable, and provide targeted and direct support. "Feasible" means the tools will definitely provide support to key projects with significant carbon reduction effects, including those regarding clean energy, energy conservation, environmental protection, and carbon emission reduction technologies. "Computable" means financial institutions can calculate emission cuts supported by loans, and then disclose the information for public supervision. "Verifiable" means third-party organizations will be invited to verify the authenticity of the information released by financial institutions to ensure the effectiveness of the policies.

The tools to support carbon emission reduction give full play to the role of monetary policy tools in policy proclamation, enabling financial institutions and enterprises to better understand the importance of green transition. The tools also promote a green and low-carbon lifestyle and a circular economy among the public. They encourage investment and financing from non-government sources to flow into green and low-carbon sectors to help achieve carbon peak and neutrality goals. This is my answer to your first question.

As for your second question regarding the impact of the Fed's monetary policy shift, I have just covered this when answering previous questions. We have noticed the recent discussions about the Fed's tightening monetary policy. As for the Chinese financial market, the interest rate of 10-year government bonds now stands at about 3%, lower than that of the previous period. The RMB exchange rate is floating both ways and financial markets are running smoothly. As I just said, our economy has maintained steady and sound performance. Therefore, I think the discussion about the Fed's monetary policy shift has a relatively small impact on China's monetary policies and financial markets. Next, the PBC will carry out international macro-policy coordination, giving prominence to China's domestic situation and jointly making a positive voice in stabilizing and reviving the world economy. Thank you.

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hb.dzwww.com:

Medium- and long-term household loans, which reflect the changing trend of property loans, increased by 3.43 trillion yuan ($529.6 billion) in the first half of 2021, the highest in recent years. However, the same period has witnessed at least two rounds of lending policies being tightened in the real estate market. Do these two facts contradict each other? What should we make of this data? Thank you.

Ruan Jianhong:

I will answer this question. According to the latest data, the outstanding balance of RMB loans to the real estate sector stood at 50.8 trillion yuan at the end of June, up 9.5% year on year. The growth rate of real estate loans was 2.2 percentage points lower than that at the end of last year, and 2.8 percentage points lower than that of total loans over the same period. The balance of real estate loans was 2.4 trillion yuan higher than that at the beginning of this year. The growth accounted for 18.9% of that of total loans over the same period, and was 569.9 billion yuan less than the same period last year.

Among them, the balance of real estate development loans was 12.4 trillion yuan, up 2.8% year-on-year. The growth rate was 3.3 percentage points lower than that at the end of last year. The balance was 343.3 billion yuan higher than that at the beginning of this year. The growth accounted for 2.7% of that of total loans over the same period, and was 401.2 billion yuan less than the previous year.

At the end of June, the balance of individual housing loans was 36.6 trillion yuan, up 13% year-on-year. The growth rate was 1.6 percentage points lower than that at the end of last year. The balance was 2.1 trillion yuan higher than that at the beginning of this year. The growth accounted for 16.7% of that of total loans over the same period, and was 160.2 billion yuan less than the previous year. Thank you.

Chen Wenjun:

Thanks to our speakers. Today's press conference concludes here. Thank you everyone.

Translated and edited by Wang Yiming, Wang Qian, Guo Yiming, Li Huiru, Liu Jianing, Yuan Fang, Yang Xi, Huang Shan, Zhang Rui, Zhang Junmian, Li Xiao, Jay Birbeck, and Tom Arnstein. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.