On September 13, the People's Bank of China (PBOC) released the financial statistics for August. Officials from relevant departments of the PBOC interpreted the statistics and answered press questions.

Q: What are the PBOC's perspectives on the financial statistics for August? What are the features of these statistics?

A: Since early this year, the PBOC has conscientiously implemented the decisions and arrangements made by the Communist Party of China Central Committee and the State Council, pursued a sound monetary policy that is flexible, moderate, precise, and effective, strengthened the counter-cyclical adjustments, and created a favorable monetary and financial environment for economic and social development. The financial statistics for August have three main features.

First, financial aggregates have witnessed reasonable growth. Recently, outstanding M2 has grown steadily. In August, both the outstanding aggregate financing to the real economy and RMB loans maintained growth rates of above 8 percent, about 4 percentage points higher than the nominal GDP growth rate in H1 2024. As economic restructuring accelerated, financial statistics maintained steady growth on a high base, and the financial sector's support for the real economy remained solid.

Second, the credit structure has been improved on an ongoing basis. More credit resources have been channeled to major national strategies, key areas, and weak links, thus providing strong support for the accelerated improvement of the economic structure. As of end-August, outstanding medium and long-term (MLT) loans to the manufacturing sector registered RMB13.69 trillion, a year-on-year increase of 15.9 percent. Specifically, outstanding MLT loans to the high-tech manufacturing sector increased by 13.4 percent year on year. Outstanding loans to technology-based small and medium-sized enterprises (SMEs) reached RMB3.09 trillion, a year-on-year growth of 21.2 percent. Outstanding loans to “specialized, sophisticated, distinctive, and innovative” enterprises totaled RMB4.18 trillion, up 14.4 percent year on year. Outstanding inclusive micro and small business (MSB) loans posted RMB32.21 trillion, a year-on-year rise of 16.0 percent. The growth rates of all the above loans are higher than the average growth in lending over the same period.

Third, interest rates have seen a continuous decline at low levels. In August, the weighted average interest rate on newly-issued corporate loans stood at 3.57 percent, 8 basis points and 28 basis points lower than those of last month and the same period last year, respectively. The interest rate on newly-issued inclusive MSB loans was 4.48 percent, 8 basis points and 34 basis points lower than those of last month and the corresponding period of the previous year, respectively, both at historical lows.

Q: What progress and results have the PBOC achieved in providing financial support for high-quality economic development?

A: Since the beginning of this year, the PBOC has made every effort to make progress in technology finance, green finance, inclusive finance, old-age finance and digital finance and focused on optimizing the credit structure. As a result, financial support for major national strategies, key areas and weak links have been remarkable more intense, adaptable and targeted.

At the macro level, we have strengthened top-level design and overall planning. We have introduced financial policies to support sci-tech innovation, green and low-carbon development, and all-round rural revitalization. Also, we have thoroughly implemented projects to enhance the capabilities of providing financial services for science and technology, green development, and SMEs, and improved the assessment and evaluation system.

At the operational level, we have improved the incentive-compatible mechanism. We have optimized the policies on central bank lending for sci-tech innovation and technological transformation and automobile consumption credit, and stepped up support for large-scale equipment renewal and trade-in of consumer goods. In addition, we have extended the term of special central bank lending for inclusive elderly care, given full play to the role of carbon emission reduction facility and inclusive MSB loan facilities, improved the mechanism for coordination with the departments of science and technology, environmental protection, and agriculture, and encouraged and guided financial institutions to intensify and upgrade their support for these areas.

As for financial services, we have supported enterprises in diversifying financing channels. We have enhanced the development of a multi-tiered bond market, thereby promoting the sustained growth of green bonds and corporate bonds for sci-tech innovation. We have upgraded our services for credit reporting, payment, and foreign exchange. Remarkable progress has been made in facilitating payment for overseas visitors. Moreover, we have actively and prudently promoted the development of pilot zones for financial reform in support of sci-tech innovation, inclusive finance and green development, and a number of financial service models that can be replicated nationwide are taking shape.

Moving forward, the PBOC will effectively implement the policy measures that have been introduced, and accelerate steps to formulate the overall plan for “five major areas” in finance and develop policies on digital finance and old-age finance, thus forming a “1 + N” policy system. In addition, we will introduce more incentive policies and tools, continue to innovate financial services in key areas, and scale up support for high-quality economic development.

Q: What measures will be taken for monetary policy in the future?

A: The PBOC will adhere to an accommodative monetary policy stance to create a sound monetary and financial environment for economic rebound. We will pursue a monetary policy that is more flexible, moderate, precise and effective, intensify macro adjustments, accelerate the effective implementation of financial policy measures that have been introduced, and start to launch additional policy measures to further reduce the financing costs for businesses and the consumer credit costs for individuals, thus keeping liquidity adequate at a reasonable level. As maintaining price stability and facilitating a moderate recovery in prices are important considerations for our monetary policy, we will meet reasonable consumer financing needs in a more targeted manner. We will continue to enhance macroeconomic policy coordination, support the proactive fiscal policy in delivering more effective results, work hard to expand domestic demand, lay equal emphasis on consumption and investment, pay more attention to consumption, phase out outdated production capacity, promote industrial upgrading, and facilitate a high-level dynamic balance between aggregate supply and demand.