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Financial sector bolsters real economy in first seven months: expert

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      China

      China

      Financial sector bolsters real economy in first seven months: expert

      2024-08-14 14:48 Last Updated At:15:27

      China's financial sector maintained stable growth in July, with increased credit flowing to key economic areas and government bond issuance boosting the expansion of social financing, reflecting ongoing efforts to support the real economy, according to an expert.

      Data released by the People's Bank of China on Tuesday showed that in the first seven months of the year, the growth rate of broad money supply (M2) and social financing both picked up, with the financial sector continuing to channel resources into critical and vulnerable sectors of the economy.

      By the end of July, the balance of broad money (M2) -- a measure that includes cash in circulation and all deposits -- stood at 303.31 trillion yuan (over 42 trillion U.S. dollars), up 6.3 percent year on year and 0.1 percentage point higher than the previous month, indicating ample liquidity in the system.

      The outstanding balance of social financing -- a measurement of funds that individuals and non-financial firms receive from the financial system -- reached 395.72 trillion yuan (over 55 trillion U.S. dollars) at the end of July, an 8.2 percent increase year on year and a 0.1 percentage point rise from June, aligning closely with expected economic and social growth targets.

      Meanwhile, renminbi loans to the real economy totaled 247.85 trillion yuan (about 35 trillion U.S. dollars), marking an 8.3 percent year-on-year increase.

      "The overall financial growth was largely stable in July, with the month-end growth rate closely mirroring that of June. The scale of social financing maintained a reasonable upward trend, showing the financial sector's continued commitment to supporting the real economy. A breakdown of the data shows that net financing from government bonds reached around 700 billion yuan (about 98 billion U.S. dollars) in July, approximately 290 billion yuan (about 41 billion U.S. dollars) more than the same period last year, significantly contributing to the steady growth of social financing. We have also observed an acceleration in the issuance of special bonds and a quicker rollout of ultra-long-term special government bonds," said Dong Ximiao, chief researcher of Merchants Union Consumer Finance Company Limited.

      Credit resources have increasingly flowed into key and vulnerable areas of the economy.

      By the end of July, medium- and long-term loans to the manufacturing sector had risen by 16.9 percent year on year. Loans to high-tech manufacturing, specialized and innovative enterprises, and micro and small enterprises grew by 15.5 percent, 15 percent, and 17 percent, respectively, outpacing the overall loan growth rate during the same period.

      "Since the beginning of this year, financial institutions have been proactively revitalizing existing loans and enhanced the efficiency of capital utilization. By recovering inefficient loans and reallocating them to new growth areas, they have significantly optimized the structure of existing loans. Currently, the positive effects of earlier policies are gradually becoming evident, driving a recovery and rebound in effective demand. With the ongoing recovery in consumption, the economic cycle is expected to smooth out, likely generating new effective financing demand," Dong said.

      Financial sector bolsters real economy in first seven months: expert

      Financial sector bolsters real economy in first seven months: expert

      Russia's Ministry of Defense on Sunday said that its forces had attacked Ukraine's artillery base, while the Ukrainian side claimed it repelled multiple Russian offensives in several directions on the same day.

      In its daily briefing, the Russian Defense Ministry reported that its military struck Ukrainian artillery base and drone factory with precision-guided munition and unmanned aerial vehicles (UAVs) in the early hours of Sunday morning.

      The Russian forces also controlled Basovka settlement in Ukraine's Sumy region.

      Over the past 24 hours, Ukraine launched seven rounds of attacks on Russian energy infrastructure, damaging power supply units which left several places without electricity.

      On the same day, Ukraine's Armed Forces General Staff said that 75 combat engagements occurred in the frontline areas, with a number of settlements across Sumy region being attacked by Russian artilleries.

      In addition, Ukrainian forces repelled dozens of Russian attacks in Lyman, Pokrovsk and other directions.

      Ukrainian President Volodymyr Zelensky said on Sunday that Russian troops fired missiles from the Black Sea into Ukraine, while calling on the international community to continue pressuring Russia to end the conflict.

      Russia claims attacking Ukrainian artillery base; Ukraine reports repelling Russian offensives

      Russia claims attacking Ukrainian artillery base; Ukraine reports repelling Russian offensives

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