In the first half of 2004, under the steering of the State Council, the People's Bank of China (PBC) used various monetary policy instruments, including strengthened open market operations and differentiated required reserve ratios for financial institutions, to appropriately control the growth of base money and the faster than desired expansion of money and credit. Macro financial control polices have since proved quite effective as growth of money supply declined, the faster than desired expansion of loans were brought under control, deposits increased steadily, and RMB exchange rate remained stable. In general, appropriate control of aggregate money and credit has contributed to the healthy and stable performance of the financial industry.
1.
The growth of money supply declined steadily, falling within the PBC projected target
At end-June, broad money (M2) stood at RMB23.8 trillion yuan, increasing year-on-year by 16.2 percent, 4.7 percentage points lower from the end of last June, or down by 3.4, 2.9 and 1.3 percentage points respectively from 2003, the end of the first quarter of 2004 and end-May. Narrow money (M1) reached RMB8.9 trillion yuan, increasing by 16.2 percent, 4.1 percentage points lower from a year earlier, or down by 2.5, 4.1and 2.4 percentage points respectively from 2003, the end of the first quarter of 2004 and end-May. Cash in circulation (M0) increased year-on-year by 12.2 percent to RMB1.9 trillion yuan. The accumulated cash withdrawal in the first half of 2004 totaled RMB72.8 billion yuan, RMB40.7 billion yuan more than that recorded for the same period of 2003. The growth of M2 and M1 both showed a trend of steady decline, with the current figure falling within the PBC's projected growth target of 17 percent.
2.
Deposits increased gradually
Outstanding deposits denominated in both local and foreign currencies in all financial institutions reached RMB24.2 trillion yuan at end-June, increasing by 17.1 percent from a year earlier. RMB deposits grew by 18.2 percent to 22.97 trillion yuan, with 2.2 trillion yuan added in the first half of 2004, 178.6 billion yuan less than that recorded for the same period of 2003. In particular, new corporate demand deposits totaled RMB352.1 billion yuan, RMB84.8 billion yuan less than the increase recorded in the same period of last year; household savings deposits increased by RMB1.01 trillion yuan, RMB52.2 billion yuan less than the growth of the same period of 2003. Foreign currency deposits climbed by USD1.9 billion, USD1.5 billion more than that recorded for the first half of 2003, to USD151.1 billion, with the growth rate approximately at the same level as that recorded a year earlier. In particular, cumulative increase of corporate deposits amounted to USD4.6 billion, USD6 billion more than the growth of the same period of 2003, while household savings deposits decreased by USD5.2 billion, a deceleration of USD6.7 billion.
3. The faster than desired expansion of credit was reined in effectively
At end-June, outstanding loans denominated in both local and foreign currencies in all financial institutions reached RMB18.1 trillion yuan, increasing year-on-year by 16.7 percent. RMB loans increased by 16.3 percent on comparable basis to 17 trillion yuan, 6.8 percentage points lower from the end of last June, or down by 4.8,3.8 and 2.3 percentage points respectively from 2003, the end of the first quarter of 2004 and end-May. New RMB loans extended in the first half of 2004 totaled RMB1.43 trillion yuan, RMB350.1 billion yuan less than that recorded for the same period of 2003 on comparable basis (Cumulative increase of loans in the first half of 2003 amounted to RMB1.78 trillion yuan, RMB 951.1 billion yuan more than that recorded for same period of 2002.) In particular, the growth of loans in June alone was RMB239.6 billion yuan less than that of last June. In terms of loan structure, short-term loans cumulatively increased by RMB544.1 billion yuan, RMB168.4 less than that recorded for the first half of 2003; medium and long-term loans increased by RMB733.1 billion yuan, RMB73.8 billion yuan up from a year earlier; paper financing increased by RMB129.2 billion yuan, a deceleration of RMB212.8 billion yuan. Balance of foreign currency loans in all financial institutions rose by 24.6 percent on comparable basis to USD134.6 billion. Cumulative increase of foreign currency loans in the first half of 2004 amounted to USD15.6 billion, USD0.8 billion more than the growth recorded for the same period of 2003. In particular, short-term loans grew by USD7.89 billion, an acceleration of USD1.85 billion, medium and long-term loans grew by USD4.35 billion, USD0.31 billion more than that recorded for the first half of 2003, while on-lending of funds raised overseas decreased by USD620 million, USD380 million more than the decline recorded for the first six months of 2003, and trust loans decreased by USD120 million, USD920 million more than that recorded for the same period of 2003. In short, the faster than desired expansion of credit since 2003 has been reined in effectively, with the growth of aggregate credit currently standing at an appropriate level.
4.
RMB exchange rate remained stable
Official foreign exchange reserves increased by USD67.3 billion, USD7.2 billion more than that recorded for the first half of 2003, to USD470.6 billion at end-June, up 35.8 percent. RMB exchange rate remained stable, being at 8.2766 yuan per US dollar, approximately the same level as that of end-2003.
Sources and Uses of Renminbi and Foreign Exchange Credit Funds of Financial Institutions
|
|||
2004-06 Unit:RMB100million yuan
|
|||
Funds Sources
|
Balance
|
Funds Uses
|
Balance
|
I. Total Deposits
|
242174.10
|
I. Total Loans
|
181046.84
|
1.Deposits of Enterprises
|
84068.71
|
1.Short-term Loans
|
90233.60
|
(1)Demand Deposits
|
58259.30
|
2.Long and Medium
-term Loans
|
74230.25
|
(2)Time Deposits
|
25809.41
|
3.Trust Loans
|
2495.59
|
2.Savings Deposits
|
120443.17
|
4.Paper Financing
|
10834.30
|
(1)Demand Deposits
|
40907.94
|
5.Other Loans
|
3253.10
|
(2)Time Deposits
|
79535.23
|
II. Portfolio Investments
|
38199.69
|
3.Trust Deposits
|
2722.29
|
III. Position for
Bullion&Silver Purchase
|
337.24
|
4.Other Deposits
|
34939.93
|
IV
. Assets in International
Financial Institutions
|
883.54
|
II. Liabilities to International
Financial Institutions
|
524.91
|
|
|
III. Other Items
|
-22231.70
|
|
|
|
|
|
|
Total
|
220467.31
|
Total
|
220467.31
|
Note:
1.Financial institutions referred to in this table include the People's Bank of China, policy banks, State-owned commercial banks, other commercial banks, city commercial banks, UCCs, RCCs, rural commercial banks, TICs, financing companies, leasing companies, postal savings institutions and foreign-funded financial institutions.
2.The Bank of China, the China Construction Bank and the Bank of Communications transferred and wrote off part of their loans in June, thus their balance of loans slightly decreased from that of end-May.
|
|||
Sources and Uses of Renminbi Credit Funds of Financial Institutions
|
||||
2004-06 Unit: RMB100 million yuan
|
||||
Fund Sources
|
Balance
|
Fund Uses
|
Balance
|
|
I
. Total Deposits
|
229670.82
|
I
. Total Loans
|
169905.22
|
|
1. Deposits of Enterprises
|
79357.97
|
1. Short-term Loans
|
86150.57
|
|
2. Fiscal Deposits
|
8192.30
|
(1) Loans to Industrial Sector
|
23271.96
|
|
3. Deposits of Government Departments&Organizations
|
7204.72
|
(2) Loans to Commercial Sector
|
17152.36
|
|
4. Household Savings Deposits
|
113792.47
|
(3) Loans to Construction Sector
|
2574.03
|
|
(1) Demand Deposits
|
39617.79
|
(4) Loans to Agricultural Sector
|
10002.22
|
|
(2) Time Deposits
|
74174.68
|
(5) Loans to Township and Village Enterprises
|
8068.46
|
|
5. Agricultural Deposits
|
5174.66
|
(6) Loans to Joint Venture Enterprises
|
2448.19
|
|
6. Trust Deposits
|
2650.21
|
(7) Loans to Privately-owned Enterprises and Individuals
|
2035.03
|
|
7. Other Deposits
|
13298.49
|
(8) Other Short-term Loans
|
20598.32
|
|
II . Financial Bond |
2604.80 |
2. Medium-term Working Capital |
6567.09 |
|
III
. Cash in Circulation
|
19017.58
|
3. Long&Medium-term Loans
|
63672.67
|
|
IV . Liabilities to International Financial Institutions
|
524.91
|
4. Trust Loans
|
2390.53
|
|
V
. Other Items
|
-10022.17
|
5. Other Loans
|
11124.36
|
|
|
|
II
. Portfolio Investment
|
30389.94
|
|
|
|
III . Position for Bullion&Silver Purchase
|
337.24
|
|
|
|
IV
. Position for Forex Purchase
|
40280.03
|
|
|
|
VI . Assets in International Financial Institutions
|
883.54
|
|
|
|
|
|
|
Total
|
241795.97
|
Total
|
241795.97
|
|
Note:
1.Financial institutions referred to in this table include the People's Bank of China, policy banks, State-owned commercial banks, postal savings institutions, other commercial banks, city commercial banks, UCCs, RCCs, TICs, financing companies, leasing companies and foreign-funded financial institutions.
2. The Bank of China, the China Construction Bank and the Bank of Communications transferred and wrote off part of their loans in June, thus their balance of loans slightly decreased from that of end-May.
|
||||
Sources and Uses of Foreign Exchange Credit Funds of Financial Institutions
|
|||
2004-06 Unit: USD100 million
|
|||
Fund Sources
|
Balance
|
Fund Uses
|
Balance
|
I
. Total Deposits
|
1510.69
|
I
. Total Loans
|
1346.13
|
1. Deposits of Enterprises
|
569.16
|
1. Short-term Loans
|
493.31
|
2. Savings Deposits
|
803.55
|
2. Long&Medium-term Loans
|
482.13
|
3. Trust Deposits
|
8.71
|
3. Trust Loans
|
12.69
|
4. Overseas Deposits
|
35.12
|
4. On-lending of Funds Raised
Overseas
|
176.97
|
5. Other Deposits
|
94.15
|
5. Paper Financing
|
13.43
|
II
. Overseas Financing
|
193.74
|
6. Other Loans
|
167.60
|
III
. Purchase and Sale of Forex
|
189.15
|
II
. Portfolio Investment
|
943.61
|
IV
. Inter-bank Transactions with
Non-residents
|
51.66
|
III
. Inter-bank Transactions with
Non-residents
|
578.28
|
V
. Other Items
|
922.78
|
|
|
|
|
|
|
Total
|
2868.02
|
Total
|
2868.02
|
Note: The Bank of China, the China Construction Bank and the Bank of Communications transferred and wrote off part of their loans in June, thus their balance of loans slightly decreased from that of end-May.
|
|||
Sources and Uses of Renminbi Credit Funds of State-owned Banks
|
|||
2004-06 Unit: RMB100 million yuan
|
|||
Fund Sources
|
Balance
|
Fund Uses
|
Balance
|
I
. Total Deposits
|
149030.09
|
I
. Total Loans
|
110704.13
|
1. Deposits of Enterprises
|
46582.21
|
1. Short-term Loans
|
46446.36
|
(1) Demand Deposits
|
34966.23
|
(1) Loans to Industrial Sector
|
17235.31
|
(2) Time Deposts
|
11615.98
|
(2) Loans to Commercial Sector
|
14100.98
|
2. Fiscal Deposits
|
8095.91
|
(3) Loans to Construction Sector
|
1278.58
|
3. Deposits of Government Departments&Organizations
|
5787.05
|
(4) Loans to Agricultural Sector
|
1331.47
|
4. Household Savings Deposits
|
82702.43
|
(5) Loans to Township and Village Enterprises
|
1766.40
|
(1) Demand Deposits
|
29197.31
|
(6) Loans to Joint Venture Enterprise
|
1483.32
|
(2) Time Deposits
|
53505.12
|
(7) Loans to Privately Owned Enterprises and Individuals
|
770.28
|
5. Agricultural Deposits
|
441.64
|
(8) Other Short-term Loans
|
8480.02
|
6. Other Deposits |
5420.85
|
2.Medium-term Working Capital |
4996.64
|
II
. Financial Bond
|
6953.19
|
3. Long&Medium-term Loans
|
52518.11
|
III
. Inter-bank Transactions
|
4353.24
|
3. Other Loans
|
6743.02
|
IV
. Cash in Circulation
|
19017.58
|
II
. Portfolio Investment
|
22139.23
|
V . Liabilities to International Financial Institutions
|
524.91
|
III
. Inter-bank Transactions
|
1382.99
|
VI
. Other Items
|
-4360.05
|
IV . Position for Bullion&Silver Purchase
|
337.24
|
|
|
V
. Position for Forex Purchase
|
40071.83
|
|
|
VI . Assets in International Financial Institutions
|
883.54
|
|
|
|
|
Total
|
175518.96
|
Total
|
175518.96
|
|
|
|
|
Note: 1.State-owned banks referred to in this table include the People's Bank of China, policy banks, State-owned commercial banks and postal savings institutions.
2. The Bank of China and the China Construction Bank transferred and wrote off part of their loans in June, thus their balance of loans slightly decreased from that of end-May. |
|||
Sources and Uses of Renminbi Credit Funds of Other Banks
|
||||
2004-06 Unit: RMB100 million yuan
|
||||
Fund Sources
|
Balance
|
Fund Uses
|
Balance
|
|
I
. Total Deposits
|
34528.91 |
I
. Total Loans
|
25707.67 |
|
1. Deposits of Enterprises
|
19990.96 |
1. Short-term Loans
|
15433.65 |
|
(1) Demand Deposits
|
12942.84 |
(1) Loans to Industrial Sector
|
4361.43 |
|
(2) Time Deposits
|
7048.12 |
(2) Loans to Commercial Sector
|
1876.50 |
|
2. Household Savings Deposits
|
6588.32 |
(3) Loans to Construction Sector
|
867.50 |
|
(1) Demand Deposits
|
2938.09 |
(4) Loans to Agricultural Sector
|
27.83 |
|
(2) Time Deposits
|
3650.23 |
(5) Loans to Township and Village Enterprises
|
15.16 |
|
3. Agricultural Deposits
|
14.17 |
(6) Loans to Joint Venture Enterprises
|
872.44 |
|
4. Other Deposits
|
7935.46 |
(7) Loans to Privately Owned Enterprises and Individuals
|
542.30 |
|
II . Issuance of Financial Bond
|
308.39 |
(8) Other Short-term Loans
|
6870.49 |
|
III . Borrowing from the central bank |
30.00 |
2. Medium-term Working Capital |
1213.58 |
|
IV
. Inter-bank Transactions
|
1632.08 |
3. Long&Medium-term Loans
|
6225.81 |
|
V
. Other Items
|
108.78 |
4. Other Loans
|
2834.63 |
|
|
|
II
. Portfolio Investment
|
5714.69 |
|
|
|
III . Deposits as Required Reserves
|
4682.98 |
|
|
|
IV
. Inter-bank Transactions
|
502.82 |
|
|
|
|
|
|
Total
|
36608.16 |
Total
|
36608.16 |
|
|
|
|
|
|
Note: 1.Other banks include Bank of Communications, CITIC Industrial Bank, China Everbright Bank, Hua Xia Bank, China Min Sheng Banking Corporation, Guangdong Development Bank, Shenzhen Development Bank, China Merchants Bank, Shanghai Pudong Development Bank, Fujian Industrial Bank and Hengfeng Bank.
2. The Bank of Communications transferred and wrote off part of its loans in June, thus its balance of loans slightly decreased from that of end-May.
|
||||
Monetary Aggregates
|
|||
2004-06 Unit: RMB100 million yuan
|
|||
|
Balance
|
Year-on-year Change (percent)
|
|
Money and Quasi-Money (M2)
|
238427.49 |
16.15 |
|
Money (M1) |
88627.14 |
16.16 |
|
Cash in Circulation (M0) |
19017.58 |
12.15 |
|
Demand Deposits |
69609.56 |
17.30 |
|
Quasi-Money |
149800.35 |
16.14 |
|
Time Deposits |
23542.04 |
24.76 |
|
Savings Deposits |
113792.47 |
16.50 |
|
Other Deposits |
12465.84 |
0.21 |
|
|
|||
Note: Investors' deposits for shares subscription are included in M2.
|
|||
|
|
|
|
Exchange Rate, Gold and Foreign Exchange Reserves |
|||
Items
|
2004
|
||
|
April
|
May
|
June
|
Exchange Rate:
|
|
|
|
一RMB yuan per SDR
(end-period)
|
|
|
|
11.9427 |
12.1573 |
12.1353 |
|
一RMB yuan per US dollar
(end-period)
|
|
|
|
8.2769 |
8.2769 |
8.2766 |
|
一RMB yuan per US dollar
(Average)
|
|
|
|
8.2769 |
8.2771 |
8.2767 |
|
Gold Reserves (in Ten Thousand Ounce)
|
1929 |
1929 |
1929 |
Foreign Exchange Reserves (USD100 million)
|
4490.17 |
4585.60 |
4706.39 |
