Q3 Financial Data: Optimized Credit Structure, Effective Monetary Policy Supports Real Economy

On October 14th, the central bank released the latest financial data, revealing the operating conditions of China's financial market in the first three quarters of this year. The data shows that despi...

On October 14th, the central bank released the latest financial data, revealing the operating conditions of China's financial market in the first three quarters of this year. The data shows that despite facing multiple challenges, the total financial indicators remained stable, the credit structure continued to optimize, and the supportive stance of monetary policy was further consolidated.

The data indicates that in the first three quarters of this year, Renminbi loans increased by 16.02 trillion yuan, with the Renminbi loan balance at the end of September growing by 8.1% year-on-year. At the same time, the social financing scale increased by 25.66 trillion yuan, which is 3.68 trillion yuan less than the same period last year, but the social financing stock at the end of September grew by 8% year-on-year, showing that the financial support for the real economy remains strong.

In terms of money supply, the balance of broad money (M2) at the end of September increased by 6.8% year-on-year, 0.5 percentage points higher than the end of the previous month. The balance of narrow money (M1) decreased by 7.4% year-on-year, while the balance of currency in circulation (M0) increased by 11.5% year-on-year. In the first three quarters, the net cash injection reached 838.6 billion yuan.

The central bank stated that the financial total indicators in September remained stable, thanks to the rapid implementation of a package of incremental monetary policies. These policies reflect the central bank's commitment to a supportive monetary policy stance, aimed at promoting the stable operation of the economy. The market generally reflects that the effects of incremental policies will further emerge, and the financial total is expected to maintain a stable growth in the future.

From the main financial statistics in the first three quarters, both household loans and corporate loans have increased. Household loans increased by 1.94 trillion yuan, and corporate (institutional) unit loans increased by 13.46 trillion yuan. Among them, medium and long-term loans accounted for a large proportion in both household loans and corporate loans.

In terms of social financing scale, although the cumulative increase in the first three quarters was 3.68 trillion yuan less than the same period last year, the Renminbi loans issued to the real economy increased by 15.39 trillion yuan, showing that financial resources are flowing more to the real economy. In addition, the net financing of corporate bonds and government bonds also reached 1.59 trillion yuan and 7.18 trillion yuan, respectively.

In terms of deposits, Renminbi deposits increased by 16.62 trillion yuan in the first three quarters, of which household deposits increased by 11.85 trillion yuan, showing that residents' willingness to save remains strong. At the same time, non-financial corporate deposits decreased by 2.11 trillion yuan, fiscal deposits increased by 724.8 billion yuan, and non-banking financial institution deposits increased by 4.5 trillion yuan.

It is worth noting that at the end of September, the balance of medium and long-term loans in the manufacturing industry increased by 14.8% year-on-year, and the balance of medium and long-term loans in high-tech manufacturing industry increased by 12% year-on-year. The loan balance of "specialized, refined, and innovative" enterprises increased by 13.5% year-on-year, and the loan balance of inclusive small and micro loans increased by 14.5% year-on-year. The growth rates of the above loans are all higher than the growth rate of various loans in the same period, showing that credit resources are flowing more to key areas and weak links of the national economy.

In addition, the weighted average interest rate of new corporate loans issued in September was 3.63%, and the interest rate of new personal housing loans was 3.32%, both of which are at historical lows. This is due to the central bank's continuous promotion of interest rate marketization reform and monetary policy adjustments in recent years, which have reduced corporate financing costs and promoted the development of the real economy.

Market experts believe that the stabilization and rebound of M2 growth rate is the result of the joint action of multiple factors. On the one hand, the introduction and implementation of a package of incremental policies have provided obvious support for the recovery of market confidence; on the other hand, the reflux of wealth management funds to deposits also supports the growth of the total amount of money. With the stock market recovering, some funds have accelerated the reflux from wealth management and other asset management products to deposits, driving the rebound of M2.Despite the year-on-year decline in social financing increment in September, market experts pointed out that this was mainly due to the high base of the same period last year. This year, the effective financing demand has been generally weaker than last year. After superimposing the high base of last year, the social financing scale and loan growth rate in September have slightly retreated. However, after excluding the high base factor, the growth rate is generally stable, and financial support for the real economy is more stable and more substantial.

The central bank stated that it will continue to adhere to a supportive monetary policy stance in the future, increase counter-cyclical adjustments, and promote stable economic operation. At the same time, it will make more use of structural monetary policy tools and increase support for major strategies, key areas, and weak links. With the recent introduction and implementation of a package of incremental policies, financial resources will flow more to major strategies, key areas, and weak links in the future. The financial support for high-quality development of the real economy will be more sufficient and the quality will be brighter.