China's financial industry remained healthy and stable in the first ten months of this year. Money supply and loans granted by financial institutions grew rapidly with credit structure improving. Household savings deposits surged and base money increased steadily with marked performance improvement of the financial institutions.
At end-October, broad money (M2) reached RMB17.73 trillion yuan, increasing by 17 percent or 4.1 percentage points higher from a year earlier. The growth rate of M2 was 9.9 percentage points higher than the sum of GDP growth and CPI increase in the first three quarters, indicating adequate money supply in consistency with the needs of economic growth. Narrow money (M1) stood at RMB6.7 trillion yuan, up 17.9 percent from a year earlier, representing an acceleration of 5.6 percentage points over end-October of 2001.
Cash in circulation (M0) at end-October reached RMB1.6 trillion yuan, up 10.6 percent from a year earlier, accelerating by 3.5 percentage points compared with that at end of 2001. During the first ten months of this year, net cash injection accumulated to RMB32.6 billion yuan, accelerating by RMB49.4 billion yuan over the same period of 2001.
Outstanding deposits in all financial institutions including foreign-funded institutions amounted to RMB16.65 trillion yuan at end-October, up 18.8 percent or accelerating by 2 percentage points from a year earlier. Corporate deposits soared by 16 percent year on year to RMB5.67 trillion yuan at end-October. Deposits in all financial institutions during the first ten months increased by RMB2331.8 billion yuan, accelerating by RMB673.5 billion yuan over the same period of 2001. Corporate deposits increased by RMB620 billion yuan, RMB170 billion yuan more than the growth of the same period of 2001.
Outstanding household savings deposits jumped by 18 percent from a year earlier to RMB8.47 trillion yuan at the end of October. The growth was 4.2 percentage points faster on a year-on-year basis or 3.3 percentage points faster compared with end 2001. Household savings deposits during the first ten months grew by RMB1104.8 billion yuan, accelerating by RMB353.4 billion yuan over the same period of last year. In specific, time deposits increased by RMB650.2 billion yuan, accelerating by RMB214.2 billion yuan; demand deposits grew by RMB454.6 billion yuan, accelerating by RMB139.2 billion yuan.
Outstanding renminbi loans by all financial institutions including foreign-funded institutions reached RMB12.71 trillion yuan at end-October, up 15.4 percent or accelerating by 4 percentage points from a year earlier, the largest single-month increase since May 1999. Loans by financial institutions increased by RMB85.1 billion yuan from a year earlier to RMB72.2 billion yuan in October alone. New loans extended during the first ten months of this year reached RMB1426.3 billion yuan, representing an acceleration of RMB500.9 billion yuan over the same period of last year.
During the first ten months of 2002, short-term loans grew by RMB326.6 billion yuan over the same period of last year to RMB616.6 billion yuan, among which industrial loans increased by RMB212.5 billion yuan, accelerating by RMB173.8 billion yuan; agricultural loans grew by RMB140.5 billion yuan, accelerating by RMB47.1 billion yuan; constructional loans increased by RMB75.2 billion yuan, accelerating by RMB55.7 billion yuan. Medium-term working capital loans grew by RMB20.7 billion yuan, decelerating by RMB26.3 billion yuan. Long and medium-term loans grew by RMB613.6 billion yuan, accelerating by RMB154.5 billion yuan. In particular, capital construction loans grew by RMB237.8 billion yuan, accelerating by RMB69.2 billion yuan; other long and medium-term loans including consumer loans accelerated by RMB88.4 billion yuan. Paper financing grew by RMB168.9 billion yuan, accelerating by RMB81.3 billion yuan.
Base money of the central bank increased by 10.2 percent to RMB3.98 trillion yuan at end-October. The renminbi exchange rate remained stable at RMB8.2771 yuan per US dollar.
Financial institutions also saw marked improvement of performance in the first ten months, as reflected in the accumulation of RMB28.7 billion yuan of profits in booking value, accelerating by RMB54.7 billion yuan over the same period of last year.
The People's Bank of China will, through following the guidance laid by the 16th CPC Congress, continue to pursue the sound monetary policy, further improve financial services, and use various monetary policy instruments flexibly to adjust money supply. Efforts will also be made to encourage commercial banks to further improve financial services, strengthen credit marketing and management, avoid duplicated construction and enhance the role of financial leverage, so as to promote the sustained, healthy and rapid development of the Chinese economy.
