The improvement in the credit structure is playing a vital role in facilitating the transformation of the economy, as indicated by central bank data released on Wednesday.
In April, inclusive loans to micro and small businesses, and medium- and long-term loans in the manufacturing industry increased by 11.9 percent and 8.5 percent year on year, respectively, both higher than the average growth rate of various loans in the same period.
Data shows that the allocation of new credit has changed significantly, with an improved existing credit structure.
In terms of businesses and households, since the beginning of 2021, the share of corporate loans has risen from about 63 percent to around 68 percent, while the share of household loans has fallen from about 37 percent to about 32 percent.
This shift shows that more credit is being directed towards real enterprises, and the decline in household financing demand is connected to more rational approach to home buying and investments.
In terms of enterprises, since the beginning of 2021, the share of loans to small and micro enterprises has increased from about 31 percent to around 38 percent, while the share of loans to large and medium-sized enterprises has decreased from approximately 69 percent to about 62 percent.
"This is partly due to the significant impact of inclusive loans to micro and small businesses, which have effectively supported businesses and benefited the public. Additionally, the development of direct financing, such as bonds, in recent years, and the growing diversification of financing options for large enterprises also contribute to this. The continued deepening of financial market development has also improved the financing match for different types of businesses," said Dong Ximiao, chief researcher of the Merchants Union Consumer Finance Co., Ltd.
Additionally, by industry, since the beginning of 2021, the share of manufacturing in total medium- and long-term loans has increased from 5.1 percent to around 9.3 percent. The share for consumer-related industries has risen from 9.6 percent to about 11.2 percent, while the share for traditional real estate and construction has decreased from 15.9 percent to around 13 percent.
Financial institutions are increasingly directing credit resources towards the manufacturing and technology innovation sectors, while also enhancing financial support for key service industries like accommodation, dining, cultural and recreational activities, and education and training. As a result, the share of loans to these sectors has significantly increased.
Improving credit structure facilitates transformation of Chinese economy
