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on september 13, the latest financial data released by the people's bank of china (hereinafter referred to as the "pboc") showed that in the first eight months of this year, rmb loans increased by 14.43 trillion yuan, and the balance of rmb loans at the end of august increased by 8.5% year-on-year; the increase in social financing scale was 21.9 trillion yuan, 3.32 trillion yuan less than the same period last year, and the social financing stock at the end of august increased by 8.1% year-on-year.

at the end of august, the balance of broad money (m2) increased by 6.3% year-on-year, the same as the previous month; the balance of narrow money (m1) decreased by 7.3% year-on-year.

when interpreting the financial statistics for august, the head of the relevant department of the central bank stated that the central bank will adhere to a supportive monetary policy stance and create a good monetary and financial environment for the economic recovery. monetary policy will be more flexible, moderate, precise and effective, increase regulatory efforts, accelerate the implementation of existing financial policy measures, and start introducing some incremental policy measures to further reduce corporate financing and household credit costs and maintain a reasonable level of liquidity. maintaining price stability and promoting a moderate price recovery are important considerations for grasping monetary policy, and reasonable consumer financing needs are met in a more targeted manner. we will continue to enhance macroeconomic policy coordination and support proactive fiscal policies to achieve better results, focus on expanding domestic demand, promote both consumption and investment, pay more attention to consumption, eliminate backward production capacity, promote industrial upgrading, and support the dynamic balance between total supply and total demand at a higher level.

let’s look at the main financial statistics in august:

1. at the end of august, the balance of broad money (m2) was 305.05 trillion yuan, a year-on-year increase of 6.3%. the balance of narrow money (m1) was 63.02 trillion yuan, a year-on-year decrease of 7.3%. the balance of currency in circulation (m0) was 11.95 trillion yuan, a year-on-year increase of 12.2%. the net cash injection in the first eight months was 602.8 billion yuan.

2. rmb loans increased by 14.43 trillion yuan in the first eight months. by sector, household loans increased by 1.44 trillion yuan, of which short-term loans increased by 132.4 billion yuan and medium- and long-term loans increased by 1.31 trillion yuan; loans to enterprises (institutions) increased by 11.97 trillion yuan, of which short-term loans increased by 2.37 trillion yuan, medium- and long-term loans increased by 8.7 trillion yuan, and bill financing increased by 759.7 billion yuan; loans to non-banking financial institutions increased by 459.1 billion yuan.

3. in the first eight months, the cumulative increase in social financing scale was 21.9 trillion yuan, 3.32 trillion yuan less than the same period last year. among them, rmb loans issued to the real economy increased by 13.42 trillion yuan, 3.57 trillion yuan less than the same period last year; corporate bond net financing was 1.78 trillion yuan, 203.1 billion yuan more than the same period last year; government bond net financing was 5.64 trillion yuan, 679.8 billion yuan more than the same period last year.

4. in the first eight months, rmb deposits increased by 12.88 trillion yuan, of which household deposits increased by 9.65 trillion yuan, non-financial enterprise deposits decreased by 2.88 trillion yuan, fiscal deposits increased by 960.6 billion yuan, and deposits of non-banking financial institutions increased by 3.59 trillion yuan.

5. the weighted average interest rate of newly issued corporate loans in august was 3.57%, 8 basis points lower than the previous month and 28 basis points lower than the same period last year; the interest rate of newly issued personal housing loans was 3.35%, 5 basis points lower than the previous month and 78 basis points lower than the same period last year, both at historical lows.

m2 continued to stabilize in august, while m1 continued to decline

at the end of august, financial aggregate indicators stabilized, with the year-on-year growth rate of m2 supply maintained at 6.3%, remaining the same for two consecutive months; at the end of august, the growth rates of both rmb loan balance and social financing stock were above 8%, about 4 percentage points higher than the nominal gdp growth rate in the first half of the year.

the current changes in the growth of total finance are actually a reflection of the changes in my country's economic structure and the related financial supply-side structure. against the backdrop of major changes in the supply and demand relationship in the real estate market and the in-depth advancement of the prevention and resolution of local government debt risks, the financial data in august still maintained steady growth on a high base.

at the end of august, the supply of m1 fell by 7.3% year-on-year, marking the fifth consecutive month of year-on-year decline. m1 is mainly corporate demand deposits, and some people also regard m1 as a reflection of corporate liquidity. industry experts said that m1 will be disturbed by short-term special factors. the recent continuous decline in the growth rate of m1 is mainly related to factors such as the management of manual interest supplements, the diversion of deposits to wealth management, and the regularization of deposits. from the overall perspective of deposits, the total amount of deposits has continued to grow recently, but demand deposits, especially corporate demand deposits, have seen a certain diversion.

the correlation between money supply and major economic indicators is affected by many factors, such as changes in industrial structure adjustment, changes in the depth of financial markets, changes in the marginal utility of money, etc. from the perspective of developed countries overseas, there is an incomplete positive correlation between the growth rate of money supply and economic growth. for example, since october 2022, the us m1 has been negative year-on-year for 21 consecutive months, with an average decline of about 7%, but from the third quarter of 2022 to the second quarter of 2024, the year-on-year growth rate of us gdp at constant prices has risen from 1.7% to 3.1%.

in the future, the total amount of finance will provide solid support for the development of the real economy. at present, the rectification of manual interest payments in the financial industry is nearing the end, which means that the "water squeeze" effect of financial data may continue for some time.

industry insiders analyzed that in the future, as the stock of financial resources is gradually activated, the efficiency of fund use will be further improved, and a smaller amount of incremental funds than before can achieve the same support effect. as the macro-economy recovers and improves, the demand for effective financing will increase, and the supply of funds in the financial sector will be more matched with the demand for effective financing, which will also help the total financial indicators to grow steadily at a reasonable level.

effective financing demand is still insufficient

compared with the data of the previous month, the scale of social financing and new rmb loans in august were higher than market expectations, but still declined year-on-year.

the banker survey released by the central bank showed that the overall loan demand index in the second quarter fell from 71.6% in the first quarter to 55.1%, the lowest value since statistics were collected in 2004. industry experts said that in the past, my country's loan demand was relatively strong, and the slowdown in credit growth was mainly due to supply-side constraints. now the loan demand index and loan growth rate are declining in the same direction, indicating that credit growth has shifted from supply-side constraints to demand-side constraints.

the reporter also learned that a major economic province in the east conducted a survey on its financial institutions, which showed that the amount and number of financial institutions' project reserves in the second quarter fell by more than 20 percentage points from the first quarter, indicating that the number of project reserves is still insufficient. financial institutions' project reserves represent the space and stamina for credit issuance, and changes in their amount and number can effectively reflect the strength of real economic demand.

market experts believe that monetary policy should continue to grasp the relationship between short-term and long-term, stable growth and risk prevention, internal and external, and accelerate the implementation of the policies and measures that have been issued. in the future, it is necessary to change the macro-control thinking, shift the focus of economic policy from expanding investment to giving equal weight to consumption and investment, and pay more attention to consumption, give full play to the policy synergy to promote the national economy to achieve a virtuous cycle, and also help to strengthen the focus of financial services.

bill financing and bond financing continue to grow

looking closely at the credit data by sector, among the loans to enterprises in august, bill financing increased by 545.1 billion yuan, continuing to maintain a large scale.

previously, many market experts have pointed out that under the conditions of meeting the requirements of real transaction relationship and creditor-debtor relationship, bills have short term, high convenience and good liquidity. small and medium-sized enterprises use bills to discount from banks, which is essentially no different from obtaining funds from bank loans. judging from the recent bill market trend, the support of bill financing channels of various banks is increasing, which can also compensate for the weakening of conventional credit supply to a certain extent. at the end of august, the discounted bills on the balance sheet reached 13.9 trillion yuan.

however, the current off-balance sheet bill "pool" is shrinking significantly, and the balance of undiscounted off-balance sheet bills has dropped from the historical high of 7 trillion yuan to the current 2 trillion yuan, reflecting that it will be difficult for bill financing to grow rapidly in the future.

looking closely at the data on the scale and structure of social financing, the net financing of corporate bonds in the first eight months was 1.78 trillion yuan, 203.1 billion yuan more than the same period last year, becoming a support item for social financing. it also reflects that finance has provided diversified support for the transformation and upgrading of the real economy.

in the context of preventing and resolving local debts and shrinking the scale of municipal debt financing, the year-on-year growth in corporate bond net financing shows that some companies have replaced credit with bonds, which is also a reflection of my country's development of direct financing. from january to july this year, the total amount of bonds issued by enterprises nationwide was 8.4 trillion yuan, an increase of 574.8 billion yuan year-on-year.

market experts believe that the scale of social financing, which covers more direct financing channels, has maintained a high growth rate this year, which is conducive to meeting the financing needs of more new driving force areas. most high-tech and innovative enterprises are mainly asset-light operations, with insufficient traditional collateral such as land and fixed assets, and are more suitable for equity and bond financing.

relevant person in charge of the central bank: the total amount of finance grew reasonably in august, and the credit structure continued to optimize

the head of the relevant department of the aforementioned central bank introduced that there are three main characteristics based on the data in august.

first, the total amount of finance has grown reasonably. the recent growth rate of m2 balance has been relatively stable. in august, the growth rates of the balances of social financing scale and rmb loans were both above 8%, about 4 percentage points higher than the nominal gdp growth rate in the first half of the year. against the backdrop of accelerated structural transformation, financial data has maintained steady growth on a high base, and the support for the real economy has remained stable.

second, the credit structure continued to optimize. credit resources flowed more to major strategies, key areas and weak links, strongly supporting the accelerated optimization of the economic structure. at the end of august, the balance of medium- and long-term loans in the manufacturing industry was 13.69 trillion yuan, a year-on-year increase of 15.9%, of which the balance of medium- and long-term loans in high-tech manufacturing increased by 13.4% year-on-year. the balance of loans to technology-based smes was 3.09 trillion yuan, a year-on-year increase of 21.2%. the balance of loans to "specialized, refined and innovative" enterprises was 4.18 trillion yuan, a year-on-year increase of 14.4%. the balance of inclusive small and micro loans was 32.21 trillion yuan, a year-on-year increase of 16.0%. the growth rates of the above loans were all higher than the growth rates of all loans in the same period.

third, interest rates continued to decline at a low level. in august, the weighted average interest rate of newly issued corporate loans was 3.57%, 8 basis points lower than the previous month and 28 basis points lower than the same period last year. the interest rate of newly issued inclusive small and micro loans was 4.48%, 8 basis points lower than the previous month and 34 basis points lower than the same period last year, both at historical lows.

the aforementioned head of the relevant department of the central bank pointed out that since the beginning of this year, the central bank has made every effort to do a good job in the "five major articles" of finance, focusing on optimizing the credit structure. the intensity, adaptability and precision of financial support for major strategies, key areas and weak links have been significantly improved.

at the macro-policy level, we will strengthen top-level design and systematic planning. we will introduce policies to support technological innovation, green and low-carbon development, and rural revitalization. we will carry out in-depth projects to enhance the financial service capabilities of science and technology, green development, and small and medium-sized enterprises, and improve the assessment and evaluation system.

at the level of working mechanisms, we will improve incentive-compatible mechanism arrangements. we will optimize the refinancing policies for technological innovation and technological transformation, and the auto consumption credit policies, and step up support for large-scale equipment renewal and the replacement of old consumer goods with new ones. we will extend the implementation period of the inclusive pension special refinancing policy, give full play to the role of carbon emission reduction support tools and inclusive small and micro loan support tools, improve the work coordination mechanism with science and technology, environmental protection, agriculture and other departments, and encourage and guide financial institutions to increase the intensity and level of support.

in terms of financial services, we support enterprises in expanding diversified financing channels. we will improve the development of a multi-level bond market and promote the continued growth of green bonds and bonds for science and technology enterprises. we will improve the level of credit investigation, payment, foreign exchange and other services, and make significant progress in facilitating payments for foreigners coming to china. we will actively and steadily promote the construction of pilot areas for science and technology innovation, inclusive finance, and green finance reforms, and a number of replicable and popularizable financial service models are taking shape.

in the next step, the central bank will implement the policy measures that have been issued, speed up the formulation of the overall plan for the "five major articles" of finance, as well as digital finance and pension finance policies, form a "1+n" policy system, introduce more incentive policies and tools, continue to deepen financial service innovation in key areas, and more effectively support high-quality economic development.