<img src='https://news.cgtn.com/news/2024-08-14/China-continues-to-wring-the-water-out-of-financial-data-1w3C9FLCO5y/img/0e643fe59bab4fa4adde30ffcb65a9eb/0e643fe59bab4fa4adde30ffcb65a9eb.png' alt='A China Construction Bank staff counting money, 2017. /CFP'
China’s overall financial data for July remained stable, reflecting the ongoing transformation and upgrading of the economy. While the overall growth of financial aggregates is slowing down, it is shifting towards high-quality development.
According to central bank data released on Tuesday, yuan-denominated loans in China increased by 13.53 trillion yuan (about $1.89 trillion) in the first seven months of the year.
Wen Bin, chief economist at China Minsheng Bank, noted that the data reflected a seasonal decline. He added that it will have the effect of “wringing the water” – eliminating bias – out of the financial data in the short term, making the data more authentic, and is conducive to the positive interactions of the financial economy.
<img src='https://news.cgtn.com/news/2024-08-14/China-continues-to-wring-the-water-out-of-financial-data-1w3C9FLCO5y/img/0e377c211fce40b39656bed22f5cafdc/0e377c211fce40b39656bed22f5cafdc.png' alt='A customer making an enquiry at a bank in Handan, Hebei Province, China, on July 11, 2024. /CFP'
At the end of July, the broad money supply (M2) increased by 6.3 percent year on year to 303.31 trillion yuan; while the narrow money supply (M1), covering cash in circulation plus demand deposits, stood at 63.23 trillion yuan, down 6.6 percent year on year.
Ming Ming, chief economist at CITIC Securities, stated that the elimination of bias has led to a decline in the growth rate of the money supply, but the efficiency of financial support to entities is improving. CITIC Securities predicts that the credit growth this year will be lower than last year’s, and credit extension will enter a new normal of “low aggregate volume but optimized structure”.
The demand for effective financing is expected to pick up. Zhou Maohua, a researcher at the Financial Market Department of China Everbright Bank, believes that future economic policies will focus more on enhancing people’s living standards and promoting consumption. As consumption recovers, the economic cycle will tend to stabilize, creating new effective financing needs.
(With inputs from CAIJING.COM)
