By love-89.com On October 14, the People’s Bank of China released financial data for the first three quarters of 2023. The figures reveal that RMB loans increased by 16.02 trillion yuan, with medium- to long-term loans for enterprises rising by 9.66 trillion yuan. Additionally, the increment in the social financing scale was 25.66 trillion yuan, including a significant 15.39 trillion yuan in RMB loans to the real economy.
We spoke with experts who indicated that various factors, including high base effects, the cleaning up of financial data, and economic restructuring, have influenced the effective support financial policies provide for stabilizing the real economy. Looking ahead, the implementation of a new round of growth-stabilizing policies is expected to further enhance enterprise operational stability and bolster macroeconomic growth momentum.
As of the end of September, M2, the broad measure of money supply, showed a year-on-year growth of 6.8%, reflecting a stabilization and rebound in monetary growth. This year, the People’s Bank has maintained a supportive monetary policy stance, employing various tools such as lowering the reserve requirement ratio and policy interest rates, which helped improve the monetary environment. By the end of September, the M2 balance reached 309.48 trillion yuan, marking a 6.8% increase year on year, an improvement of 0.5 percentage points from the previous month.
Dong Ximiao, Chief Researcher at Zhaolian, explained that the recent package of incremental policies has significantly boosted market confidence. Particularly, the shift of financial assets back to deposits has supported overall money supply growth. Meanwhile, Wen Bin, Chief Economist at China Minsheng Bank, noted that the stabilization and rebound in M2 growth can be attributed to two main factors: the recent introduction and implementation of new policies that have bolstered market confidence and the reduction in the reserve requirement ratio by 0.5 percentage points, injecting around 1 trillion yuan in long-term liquidity into the financial market.
He pointed out that the base effect from the same period last year has also contributed to the year-on-year increase in M2 growth. Furthermore, the fiscal policies planned for the fourth quarter, including a potential surge in government bond issuance, are likely to lead to a noticeable rebound in M2 and M1 growth rates.
In terms of RMB loans, the increase of 16.02 trillion yuan in the first three quarters underscores the continued financial support for strategic initiatives, key sectors, and vulnerable areas. The People’s Bank has been focusing on critical aspects of high-quality development, creating structural monetary policy tools to direct financial resources to essential areas, particularly bolstering support for technological innovation and real estate stabilization.
Data shows that by the end of September, the RMB loan balance reached 253.61 trillion yuan, up 8.1% year on year. The first three quarters saw household loans increase by 1.94 trillion yuan and corporate loans rise by 13.46 trillion yuan. The loans issued to the real economy totaled an additional 15.39 trillion yuan during this period, with the September-end balance standing at 250.87 trillion yuan, reflecting a 7.8% year-on-year increase.
Dong Ximiao further explained that the credit structure is improving, as loans to small and micro enterprises, as well as medium- to long-term loans for the manufacturing sector, are growing faster than general loans. This indicates a strengthened focus on key strategies and vulnerable areas. Wen Bin added that seasonal effects led to a notable improvement in new credit in September, bolstered by a series of policies introduced in late September aimed at stabilizing the real estate market and promoting investment and consumption.
In terms of financing costs, recent monetary policy moves by the People’s Bank have contributed to a sustained decrease. On September 27, the bank lowered the reserve requirement ratio by 0.5 percentage points and adjusted the seven-day reverse repurchase rate, resulting in a downshift in both medium-term lending facility rates and loan market quotation rates.
Dong emphasized that the combination of policies implemented this year has significantly boosted market confidence and expectations, aiding in economic recovery. As loan rates decrease, it is expected to lower financing costs for enterprises and households. Currently, commercial banks are accelerating adjustments to existing mortgage rates. The coordinated financial policies alongside already introduced fiscal and employment measures will synergistically promote stabilization in the real estate market.
Wen concluded that the recent financial data indicates that both credit and social financing increments are remaining within a reasonable range, effectively meeting the funding needs of the real economy. Looking forward, the ongoing emphasis on growth-stabilizing policies is expected to maintain investment strength in infrastructure and manufacturing while gradually stabilizing real estate sales, further enhancing the operational climate for enterprises and bolstering macroeconomic growth momentum.