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Liquidity in China's interbank market has remained reasonable and stable, and credit growth has been moderate, the People's Bank of China (PBOC) said Monday.
Interest rates have stayed largely stable and overall financing costs have edged down, a PBOC official said in an interview with Financial News. "The financial sector has provided solid support for the real economy...and played an important role in preventing financial risks."
The PBOC has maintained a prudent and neutral monetary policy and stepped up efforts in policy fine-tuning, which "achieved sound results," the official said.
M2, a broad measure of money supply that covers cash in circulation and all deposits, grew 8.3 percent year on year in May, unchanged from a month earlier. New loans went up year on year to 1.15 trillion yuan (about 180 billion US dollars) in May.
Total social financing (TSF), a broad measure of funds that non-financial firms and households get from the financial system, increased 10 percent from a year ago by the end of May.
"Credit and TSF growth were moderate," the official said, adding that off-balance sheet financing has been falling due to strengthened regulation and de-leveraging policies.
In terms of recent bond default, the official said risks remained controllable and the new default cases emerged after regulators toughened up supervision.
"The bond default rate was low. By the end of May, unpaid corporate debentures in default cases stood at 66.3 billion yuan, accounting for 0.39 percent of the total outstanding bonds."
The official said China's economy remained resilient with stable indicators, a more balanced supply-demand relation, and a faster shift of economic drivers. "The economy will continue to see stable, healthy growth in the medium and long run."
The PBOC will closely track economic and financial changes at home and abroad, and make more efforts to fend off external impacts, stabilize market expectations, and ensure stable financial development, the official said.
Moreover, China’s economy has shown a stable trend on the supply side. The current supply and demand in the domestic market has been improved, and the economic structure has been continuously optimized, according to Niu Li, Deputy Director of the Economic Forecast Department of the State Information Center.
“From the perspective of performance indicators, from January to April this year, the total profit of industrial enterprises above designated size reached 2.127 trillion yuan (0.329 US dollars), a year-on-year increase of 15 percent, and the growth rate was 3.4 percentage points higher than that of January-March, “said Niu Li.
“As for the leading indicators like Manufacturing Purchasing Managers Index (PMI), in May, the manufacturing PMI was 51.9 percent, which was 0.5 and 0.7 percentage points higher than the previous month and the same period of last year, reaching the highest point since October 2017”.
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“Also, the Consumer Confidence Index (CCI) has risen with outstanding performance.”
A report issued by Nielsen, a global monitoring and data analysis company, showed that China’s consumer confidence index hit a new high in 10 years in the first quarter, reaching 115 points.
"The accelerated expansion in the manufacturing sector also indicates that China's economic development is further enhanced." Niu Li added.
(ASIA PACIFIC DAILY)
