Social financing slumps 4.7%
By Winny Wang |
July 16, 2011, Saturday
|
Print Edition
Print Edition
CHINA'S social financing declined about 4.7 percent in the first half of this year from a year earlier, reflecting the central bank's tight monetary policy.
Social financing, including loans, bank acceptance bills, corporate bonds and equity financing, reached 7.76 trillion yuan (US$1.21 trillion) by the end of June, 384.7 billion yuan less than a year ago, the People's Bank of China said in a statement yesterday.
"Social financing declined 7 percent in the first quarter of this year, but the drop narrowed to about 2 percent in the second quarter, indicating the tightening policies are mainly curbing bank loans rather than non-banking financing channels," said Yao Wei, an economist at Societe Generale.
Banks in China extended 4.17 trillion yuan of local currency loans in the first six months, decreasing about 10 percent from a year earlier, the central bank said. New yuan loans accounted for 53.7 percent of total social financing, dropping 3.2 percentage points from a year earlier.
"The central bank's move to curb lending is working since the percentage of bank loans was under 55 percent, but it's more difficult to control other financing channels by raising the reserve requirement ratio," Yao said.
She also said that the China Banking Regulatory Commission's latest effort to regulate financial products was a good move to control non-banking financing channels.
New foreign currency loans jumped 117.9 billion yuan to 336.1 billion yuan in the first half.
"This year's social financing is expected to decrease no more than 5 percent from a year earlier," Yao said.
The central bank began revealing social financing data on a quarterly basis this year as loans alone don't show the full picture of monetary conditions in the country with a growing number of financing sources. Total social financing includes all funds raised by entities in the real economy.
Social financing, including loans, bank acceptance bills, corporate bonds and equity financing, reached 7.76 trillion yuan (US$1.21 trillion) by the end of June, 384.7 billion yuan less than a year ago, the People's Bank of China said in a statement yesterday.
"Social financing declined 7 percent in the first quarter of this year, but the drop narrowed to about 2 percent in the second quarter, indicating the tightening policies are mainly curbing bank loans rather than non-banking financing channels," said Yao Wei, an economist at Societe Generale.
Banks in China extended 4.17 trillion yuan of local currency loans in the first six months, decreasing about 10 percent from a year earlier, the central bank said. New yuan loans accounted for 53.7 percent of total social financing, dropping 3.2 percentage points from a year earlier.
"The central bank's move to curb lending is working since the percentage of bank loans was under 55 percent, but it's more difficult to control other financing channels by raising the reserve requirement ratio," Yao said.
She also said that the China Banking Regulatory Commission's latest effort to regulate financial products was a good move to control non-banking financing channels.
New foreign currency loans jumped 117.9 billion yuan to 336.1 billion yuan in the first half.
"This year's social financing is expected to decrease no more than 5 percent from a year earlier," Yao said.
The central bank began revealing social financing data on a quarterly basis this year as loans alone don't show the full picture of monetary conditions in the country with a growing number of financing sources. Total social financing includes all funds raised by entities in the real economy.
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