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Cailianshe News, August 13 (Reporter Wang Hong)Today, the central bank released financial data for July. The data showed that at the end of July 2024, the balance of broad money (M2) was 303.31 trillion yuan, a year-on-year increase of 6.3%, 0.1 percentage point higher than the end of the previous month. The balance of narrow money (M1) was 63.23 trillion yuan, a year-on-year decrease of 6.6%. The balance of currency in circulation (M0) was 11.88 trillion yuan, a year-on-year increase of 12%. The net cash injection in the first seven months was 539.6 billion yuan.

At the end of July, the stock of social financing scale was 395.72 trillion yuan, an increase of 8.2% year-on-year, 0.1 percentage point higher than the previous month, basically in line with the expected targets of economic growth and price levels. Among them, the balance of RMB loans issued to the real economy was 247.85 trillion yuan, an increase of 8.3% year-on-year.

In addition, data shows that the fundraising growth rate of asset management products was relatively fast, with a year-on-year increase of 10.3% at the end of July, which diverted on-balance sheet deposits of banks to a large extent.

Overall, the growth rate of monetary supply indicators such as M2 and M1 has slowed down since the beginning of this year. Experts said today that in the short term, the squeezing of financial data still has an impact on the total indicators. However, "squeezing out water" promotes more real and more realistic financial total data, and is conducive to the benign interaction of finance and economy. It is emphasized that at present, financial data has basically stabilized and maintained reasonable growth.

Is financial data still being “watered down”?

In recent months, the growth rate of M1 has continued to decline. Experts admit that in the short term, the squeezing of financial data will still have an impact on the total indicators. After some of the inflated deposits and loans are squeezed out, the financial data will decline to a certain extent. Especially considering that some of the previous corporate demand deposits obtained relatively high returns through manual interest supplements, after these behaviors were standardized, corporate demand deposits declined, and some are gradually transforming into financial management. The impact in this regard will continue to appear, resulting in a continuous decline in M1 in recent months.

However, the expert stressed that "squeezing out water" will make the total financial data more real and more substantial. In the past period of time, part of the funds in the growth of corporate debt were idle, and the loans were directly converted into deposits, which did not stimulate investment and affect the real economy. After the financial management department standardized these behaviors, the price ratio between deposit income and expected investment return rate changed, the arbitrage space disappeared, and some companies vacated funds to expand investment and increase R&D investment, which will be more conducive to financial support for the high-quality development of the real economy in the future. A pharmaceutical company reported that after standardizing manual interest payments, the company withdrew 200 million yuan of deposits in a large bank to build new production workshops and purchase related equipment to expand reproduction.

At the same time, "squeezing out water" is conducive to the healthy interaction of finance and economy. Industry experts believe that "squeezing out water" from financial data can also help solve the "chain trap" of corporate arrears, improve corporate capital turnover efficiency, better meet the effective financing needs of business entities, and improve the quality and level of financial services. After failing to obtain high interest subsidies for corporate deposits, a paper product manufacturing company transferred 4 million yuan from its bank account to pay off its arrears to upstream companies.

How do you view the increase in bill financing?

In terms of loans, at the end of July, the balance of various RMB loans was 251.11 trillion yuan, an increase of 8.7% year-on-year. From January to July, various loans increased by 13.53 trillion yuan. By sector, household loans increased by 1.25 trillion yuan, of which short-term loans increased by 60.8 billion yuan and medium- and long-term loans increased by 1.19 trillion yuan; loans to enterprises (public institutions) increased by 11.13 trillion yuan, of which short-term loans increased by 2.56 trillion yuan, medium- and long-term loans increased by 8.21 trillion yuan, and bill financing increased by 214.6 billion yuan; loans to non-banking financial institutions increased by 594.6 billion yuan.

The market is concerned about the large increase in bills in new loans in July. In this regard, experts said that it should be noted that on-balance sheet bills are a component of loans and an important financing channel for the real economy, especially small and medium-sized enterprises. Under the requirements of real transaction relationships and creditor-debtor relationships, bills have short terms, high convenience and good liquidity. Small and medium-sized enterprises use bills to discount from banks, which is the same as obtaining funds from bank loans.

"Especially when there is insufficient effective financing demand, banks need to increase their support for the real economy in the short term. However, when project reserves are insufficient, banks can increase direct and transfer discounts of bills and convert undiscounted bills representing corporate credit into on-balance sheet bill financing representing bank credit, which provides real financial support to enterprises." The above-mentioned expert also mentioned that as bill interest rates decline, the cost of bill financing for small and medium-sized enterprises will also be reduced accordingly, which can also stimulate financing demand.

Is effective financing demand still insufficient?

From the perspective of credit flows, data from the central bank show that credit resources are flowing more to key areas and weak links of the national economy. At the end of July, the balance of medium- and long-term loans to the manufacturing industry was 13.63 trillion yuan, a year-on-year increase of 16.9%, of which the balance of medium- and long-term loans to high-tech manufacturing industries increased by 15.5% year-on-year; the balance of loans to "specialized, refined, special and innovative" enterprises was 4.17 trillion yuan, a year-on-year increase of 15.0%; the balance of inclusive small and micro loans was 32.1 trillion yuan, a year-on-year increase of 17%. The growth rates of the above loans are all higher than the growth rates of all loans in the same period.

Experts believe that financial data presents new characteristics and largely reflects the pain of the transition from old to new drivers. "With the acceleration of my country's economic structural transformation and upgrading, the loan "big guys" such as real estate and local financing platforms, which have traditionally relied heavily on credit funds, have gradually adjusted, which is reflected in the fact that credit data is not growing or even shrinking. The loan demand in new driving force fields such as technological innovation, advanced manufacturing, and green development is difficult to fully continue in the short term, and it cannot make up for the "pit" formed by the decline in loans in traditional fields, resulting in fluctuations in credit growth."

As the economy gradually resumes a virtuous cycle, effective financing demand will also pick up. Industry experts believe that the effects of previous policies are still gradually emerging, which will drive the recovery of effective demand. In the future, the focus of economic policies will shift more to benefiting people's livelihood and promoting consumption, with the focus on boosting consumption to expand domestic demand. As consumption recovers, the economic cycle will be smoother, and new effective financing demand will be created.

(Cailian News reporter Wang Hong)