Finance

Financial performance remained sound and stable in the first half of this year, though deposits and loans increased at a quick pace, said the People's Bank of China (PBC), the country's central bank.

During the January-June period, the increase of money supply began to slow (see graph 1). A total of 56.3 billion yuan of cash was withdrawn from circulation, the same as the figure in the same period last year.

In the first six months, deposits grew rapidly. The month-end outstanding renminbi and foreign currency deposits of all financial institutions totaled 33.13 trillion yuan, increasing 17.19 percent year on year (see graphs 2 and 3). From January to June, 3.23 trillion yuan of renminbi deposits were added to the balance, 632.4 billion yuan more than that in the same period last year. Of the total, deposits from households increased 1.42 trillion yuan, 132.8 billion yuan more than the figure a year ago. Of the newly increased renminbi deposits from households, time deposits and demand deposits accounted for 936 billion yuan and 489.4 billion yuan, respectively. Deposits from non-financial institutions increased 1.35 trillion yuan, 430.7 billion yuan more than in the year-earlier period, of which deposits from corporations rose 805.2 billion yuan, 256.4 billion yuan more than that in the same period last year. At the same time, deposits from government agencies grew 437.5 billion yuan, 55.8 billion yuan higher than the figure a year ago.

In June alone, renminbi deposits increased 410.8 billion yuan, 218.7 billion yuan less than the figure a year ago. Of this total, deposits from households and non-financial institutions increased 154.2 billion yuan and 363.5 billion yuan, respectively, but those from government agencies saw a decline of 119.2 billion yuan.

From January to June, $8.8 billion of foreign currency deposits were added to the balance, $1.7 billion less than the figure in the same period last year. In June alone, foreign currency deposits rose $3.4 billion.

At the end of June, the excess reserve ratio of all financial institutions stood at 3.1 percent, 0.65 percentage points lower than the ratio a year ago.

From January to June, loans grew rapidly. As of the end of June, the outstanding renminbi and foreign currency loans of all financial institutions totaled 22.79 trillion yuan, up 14.34 percent over the year-earlier period. A total of 2.18 trillion yuan of renminbi loans were granted in the first six months, 723.3 billion yuan more than those in the same period last year. Of the total, loans granted to households increased 367 billion yuan, up 96.8 billion yuan from a year ago, and those granted to non-financial institutions grew 1.81 trillion yuan, 626.5 billion yuan more than the figure in the year-earlier period.

In June alone, newly increased renminbi loans stood at 394.7 billion yuan, 70.6 billion yuan less than that a year ago. Of them, households and non-financial institutions received 82.3 billion yuan and 312.4 billion yuan, respectively.

In the January-June period, foreign currency loans increased $7.5 billion, a decline of $8.7 billion compared with the year-earlier period. In June alone, $300 million of foreign currency loans were added to the balance, $1.6 billion less than a year ago.

At the end of June, foreign exchange reserves stood at $941.1 billion, surging 32.37 percent year on year. In the first six months, foreign exchange reserves increased $122.2 billion, $21.2 billion more than the figure in the same period last year. In June alone, foreign exchange reserves rose $16.1 billion, a decline of $3.9 billion from a year ago.

Corporate Commodity Prices

In June, corporate commodity prices monitored by the PBC inched up 0.4 percent over May and rose 2.3 percent over a year ago (see graph 4). Of the total, prices of capital goods went up 0.5 percent over the previous month and gained 3.2 percent compared with the same period last year, while those of consumer goods climbed 0.1 percent from May and 0.4 percent from a year ago.

During this month, prices of agricultural produce were up 0.5 percent from the previous month and rose 2.8 percent compared with the year-earlier period. Of the total, grain prices increased 1.7 percent over May and climbed 4.2 percent over a year ago. Prices of aquatic products remained the same as the previous month but decreased 2.5 percent year on year.

In June, prices of iron ore inched up 0.6 percent from May and increased 1.6 percent compared with the same period last year while those of rolled steel grew 2.9 percent over the previous month but saw a decline of 1.9 percent over the year-earlier period.

Prices of energy rose 1.1 percent in June over a month ago and jumped 10.1 percent over the same period last year (see graph 5).

Mainland-HK/Macao Trade

Trade between the Chinese mainland and Hong Kong soared more than 20 percent to $72.64 billion in the first half of this year, according to statistics released by the Ministry of Commerce. The mainland exported $67.51 billion worth of goods to Hong Kong, increasing 27.4 percent, while imports from Hong Kong dropped 14.6 percent to $5.14 billion.

From January to June, the mainland attracted 7,028 projects with direct investment from Hong Kong with the commitment of $31.91 billion. The paid-in capital reached $8.83 billion. By the end of June, over 261,000 Hong Kong-invested projects were under construction on the mainland. The commitment and paid-in capital stood at $559.8 billion and $268.36 billion, respectively.

At the end of June, there were over 21,000 mainland people working in Hong Kong.

During the January-May period, the mainland also saw trade with Macao grow to $890 million, with both imports and exports surging nearly 60 percent. The mainland attracted 377 projects involving direct investment from Macao, a year-on-year increase of 19.3 percent, but the paid-in capital fell 10.7 percent to $290 million.

By the end of June, over 10,000 projects with investment from Macao were under construction in the mainland. The commitment and paid-in capital arrived at $16.58 billion and $6.62 billion, respectively.

The number of mainland people working in Macao reached 33,275 at the end of June.