Historic low loan interest rates in China cut financing, credit costs

China's loan interest rates have declined to a relative historic low level recently, lowering the financing costs for enterprises and credit costs for the people.

In July, the country's loan prime rate (LPR) fell, leading to a further decrease in loan interest rates.

According to the People's Bank of China (PBOC), the weighted average interest rate on new corporate loans stood at 3.65 percent in July, and the interest rate on new personal housing loans at 3.4 percent, down 22 basis points and 68 basis points year on year, respectively, both at historic lows.

"At present, the pressure of a narrowing net interest margin faced by commercial banks is still huge. The PBOC has resisted internal and external pressure to continue cutting interest rates, and guided the 1-year and 5-year LPR to fall by 10 basis points and 35 basis points, respectively, which is not easy and fully demonstrates the strategic determination of our monetary policy based on our own conditions and needs," said Dong Ximiao, chief researcher at Merchants Union Consumer Finance Company Limited.

In addition, in late July, the PBOC announced that it would adjust the 7-day reverse repo operation in the open market to follow a fixed rate and invite quantity bidding.

Experts say this will establish the position of the 7-day reverse repo interest rate as the policy interest rate and stabilize market expectations.

"The recent array of reform measures of the PBOC are conducive to improving the formation and regulation mechanism of market-oriented interest rates. In the future, with the smooth transmission of interest rates from short-term to long-term ones, the quotation quality of the LPR will continue to improve, and the quality and effectiveness of the interest rate policy to support the real economy will also improve further," said Dong.

Historic low loan interest rates in China cut financing, credit costs

Historic low loan interest rates in China cut financing, credit costs

Historic low loan interest rates in China cut financing, credit costs

Historic low loan interest rates in China cut financing, credit costs

Historic low loan interest rates in China cut financing, credit costs

French companies participating in the 2024 China International Fair for Trade in Services (CIFTIS) are seeking to delve deeper into the Chinese market, with the European nation featured prominently at this year's fair running from Sept 12 to 16 in Beijing.

As 2024 marks the 60th anniversary of the diplomatic ties between China and France, France is the guest country of honor at this year's CIFTIS and a special national pavilion was set up for the event being held with the theme "Global Services, Shared Prosperity".

Pascal Gondrand, commercial investment counselor of the French Embassy in China, underscored the important role services trade plays in driving France's economy, saying that the trade fair serves as a great platform for players in the international services trade sector to engage with each other and explore cooperation opportunities.

"CIFTIS is a very important exhibition dedicated to services. Services account for 30 percent of France's trade and employ 8 million people in France, so it's a powerful driver of collaboration and exchange with our international partners, especially in China. It is also a key factor in attracting foreign investors in France, especially for Chinese investors," Gondrand said in an interview with the China Central Television (CCTV) at the fair on Friday.

Gondrand said a dozen or so French firms attending this year's fair are looking for cooperation opportunities in a wide range of areas such as insurance, art of living, exhibition, health, energy and aviation.

He also highlighted that France was represented at the fourth China International Consumer Products Expo held in April in the southern Chinese province of Hainan and will also see its companies' attendance at the seventh China International Import Expo (CIIE) scheduled to take place in November in Shanghai.

"This year we will be present at three major exhibitions in China: the consumer fair in Hainan, the CIIE import exhibition in Shanghai, and of course, CIFTIS in Beijing. These events are key for us to support French companies and promote for strengthening of economic and trade exchange between France and China," Gondrand said.

A dedicated exhibition area covering 11,000 square meters has been launched for sports services at this year's fair.

As the host nation of the 2024 Summer Olympics, France is giving prominence to its sports industry, making it one of the pavilion's three themed displays.

GL events, a French entertainment and medium enterprise, along with 300-odd exhibitors from around the world, are seeking to build partnerships with Chinese companies.

"There is a lot of sports events in China. It's massive; it's a massive market," said Ines Ginon, president of GL events Greater China.

"France and China are two great sporting nations. They host major international sporting events. So, the cooperation is very important between our countries, and it will be highlighted during CIFTIS," Gondrand said.

A total of 85 countries and international organizations, and over 450 Fortune Global 500 companies and leading companies of various industries, are represented at the 2024 CIFTIS.

Chinese authorities said Thursday that the country will keep pushing forward institutional opening up of trade in services to deepen international cooperation and advance unrestricted global trade.

French firms attending Beijing services trade fair seek growing presence in China