Red Star News:

What were the key highlights in social financing and money supply growth in the first half of this year? How should we interpret these trends? Thank you.

Zou Lan:

Thank you. Mr. Yan will answer your questions. 

Yan Xiandong:

Since the beginning of the year, the PBC has thoroughly implemented the decisions and arrangements of the CPC Central Committee and the State Council, adopting a moderately accommodative monetary policy while maintaining ample liquidity.

Financial aggregate data for the year's first half showed that social financing scale and money supply grew steadily, matching expectations for economic growth and overall price levels. By the end of June, China's social financing scale and broad money supply (M2) both posted year-on-year growth of 8.9% and 8.3% respectively, up 0.8 and 2.1 percentage points from the same period last year.

Aggregate social financing grew at a reasonable pace, with the financial system effectively meeting the funding needs of the real economy. In the first half, the increment in aggregate social financing totaled 22.83 trillion yuan, up 4.74 trillion yuan year on year. On the one hand, proactive fiscal policy took effect early, with the financial system strengthening coordination, leading to substantial year-on-year growth in government bond financing. In the first half, net government bond financing reached 7.66 trillion yuan, up 4.32 trillion yuan year on year. Of this, net treasury bond financing totaled 3.37 trillion yuan, up 1.8 trillion yuan year on year, while net local government bond financing reached 4.29 trillion yuan, up 2.52 trillion yuan year on year. On the other hand, financial institutions maintained solid credit support for the real economy. In the first half, financial institutions extended 12.74 trillion yuan in new yuan-denominated loans to the real economy, up 279.6 billion yuan year on year.

M2 rebounded from the same period last year, maintaining ample liquidity. First, government bonds were issued earlier, leading to increased bond investments by financial institutions and corresponding increases in money creation. In the first half, with heavy government bond issuance, financial institutions' bond investments increased 6.01 trillion yuan, up 3.19 trillion yuan year on year. Second, steady credit growth also supported money creation. Additionally, measures to address capital circulation last year resulted in a lower monetary base in the same period last year. This year, corporate deposit growth recovered, driving up money supply growth. In the first half, corporate deposits increased 1.77 trillion yuan, up 3.22 trillion yuan year on year.

Overall, financial aggregates grew at a reasonable pace in the first half, providing strong support for the real economy's recovery and improvement. Thank you.