Data from the People's Bank of China on October 14th shows that by the end of September, the stock of social financing in China reached 402.19 trillion yuan, a year-on-year increase of 8%; the balance of all RMB loans was 253.61 trillion yuan, a year-on-year increase of 8.1%; and the broad money supply (M2) grew by 6.8% year-on-year at the end of September, 0.5 percentage points higher than the previous month, maintaining a steady and rising trend.
"The current stabilization and rebound of M2 growth is the result of the combined effects of various factors. The recent introduction and implementation of a package of incremental policies have provided clear support for the recovery of market confidence," said an authoritative figure to the press. In particular, the return flow of wealth management funds to deposits has supported the growth of the total money supply. The market generally reflects that the effects of incremental policies will further manifest, and the financial total is expected to maintain a stable growth in the future.
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Regarding the financial total data for September, experts interviewed generally believe it is within a reasonable range. "Despite the existence of weak effective financing demand, financial data 'squeezing out water', and economic structural transformation, and other multiple challenging factors, the overall growth rate of financial data still remains within a reasonable range," said Dong Ximiao, Chief Researcher at China United.
He also pointed out that the high base of the same period last year is an important factor affecting the changes in the social financing scale and loan growth in September this year. Last year, the financial industry's value-added accounting method was mainly based on the push calculation of deposit and loan growth rates. Some local governments, in order to promote regional economic growth, supervised financial institutions to increase loan disbursement, resulting in a high loan base. With the optimization and adjustment of the financial industry's value-added accounting method, this phenomenon has significantly decreased this year.
From the perspective of credit structure, credit resources flow more to key areas and weak links of the national economy. Authoritative experts said that in recent years, as China's economic structure has been transformed and upgraded, the credit structure has also been adjusted accordingly. The overall demand for credit in traditional areas such as real estate and local financing platforms has contracted, and new drivers such as green development and technological innovation have accelerated, although it is difficult to fill the gap in credit growth in the short term, it is also accelerating to make up for it.
The reporter learned that by the end of September, the balance of inclusive small and micro loans was 32.90 trillion yuan, a year-on-year increase of 14.5%; by the end of September, the balance of medium and long-term loans in the manufacturing industry was 13.88 trillion yuan, a year-on-year increase of 14.8%; the balance of loans to "specialized, refined, and innovative" enterprises was 4.26 trillion yuan, a year-on-year increase of 13.5%.
"With the gradual implementation of the recently introduced package of incremental policies, financial resources will flow more to major strategies, key areas, and weak links in the future. The financial support for the high-quality development of the real economy will be brighter and more substantial," said Wen Bin, Chief Economist at China Minsheng Bank.
While the credit structure continues to optimize, corporate financing costs are also decreasing, business confidence is recovering, and investment activities are improving. A petrochemical company in Huizhou, Guangdong, said that the cumulative effect of a series of policies this year has been evident, corporate financing costs continue to decline, the company's loan interest rate has dropped from 3.2% at the beginning of the year to 2.85%, and the financial cost may further decrease after this round of reserve requirement ratio reduction and interest rate cut. The company plans to invest more resources in product research and development, market expansion, and talent introduction.
A textile company in Dongguan, Guangdong, said that this year, the counter-cyclical adjustment of macro policies has been intensified, market interest rates have continued to decline, and the company's recent loan renewal rate has dropped by 100 basis points compared to last year. In the future, more funds can be used to expand production and operations.
Looking forward to the subsequent monetary policy, the market generally believes that with the continuous implementation of a package of incremental policies, social effective demand is expected to gradually recover, and the mechanism of financial institutions daring to lend and willing to lend will be further improved. The stable growth of the financial total still has a solid foundation, and the quality and efficiency of financial support for the high-quality development of the real economy will continue to improve.Wen Bin stated that since the beginning of this year, the overall regulatory approach of monetary policy has adapted to changes in the situation. Against the backdrop of accelerated economic structural adjustment, transformation and upgrading, and the conversion of old and new drivers, the future exploration of effective domestic demand, especially in promoting the expansion of consumer demand, monetary policy will work together with other macro policies to jointly support the dynamic balance of supply and demand in the economy.