Finance

Financial performance remained sound and stable in July, although loans increased at a quick pace, said the People's Bank of China (PBC), the country's central bank.

In July, money supply increased more rapidly (see graph 1). A total of 28.4 billion yuan of cash was put into circulation in this month, 3.8 billion yuan less than in the same period last year.

During this month, renminbi loans grew substantially. At the end of July, the outstanding renminbi and foreign currency loans of all financial institutions stood at 22.94 trillion yuan, up 15.4 percent compared with the year-earlier period. This was 1.1 percentage points higher than the rate in the previous month and 2.4 percentage points higher than that in the same period last year (see graph 2). Of the total, renminbi loans granted to households and non-financial corporations grew 16.4 percent and 16.3 percent, respectively, year on year.

In July, 171.8 billion yuan of renminbi loans were added to the balance, 203.2 billion yuan more than the figure in the same period last year. Of them, newly increased short-term loans and paper financing stood at 14.6 billion yuan, 67.4 billion yuan more than that in the same period last year, newly increased middle- and long-term loans grew 133.9 billion yuan to 149.3 billion yuan, while other renminbi loans increased 1.9 billion yuan.

In July, the increase of deposits from households continued to slow down while deposits from non-financial corporations grew at a quicker pace. The month-end outstanding renminbi and foreign currency deposits of all financial institutions arrived at 33.26 trillion yuan, gaining 17.3 percent over the year-earlier period, 0.5 percentage points higher than the rate in the same period last year. Of the total, deposits from households stood at 16.3 trillion yuan, up 15.1 percent from a year ago, 1.9 percentage points lower than the rate in the same period last year. Meanwhile, those from non-financial corporations went up 17.8 percent to 14.87 trillion yuan, 0.6 percentage points higher than the rate in the same period of 2005.

Since initial public offers were resumed on the domestic market in May and the stock market remained bullish in the previous two months, part of the savings deposits from households were transferred into securities investment, leading to a slower increase of savings deposits from households. At the same time, more people chose demand deposits. From January to July, newly increased demand deposits were 130.8 billion yuan more than those in the same period last year, while newly increased time deposits were 132.2 billion yuan less than the figure in the same period last year.

Deposits from non-financial corporations stood at 10.31 trillion yuan at the end of July, expanding 16.2 percent year on year, 0.2 percentage points higher than the rate in June and 2.7 percentage points higher than the growth in the same period last year.

In July, renminbi transactions in the inter-bank market amounted to 3.52 trillion yuan, or 167.6 billion yuan per day, 66.7 billion yuan more than the figure in the year-earlier period.

Corporate Commodity Prices

In July, corporate commodity prices monitored by the PBC inched up 0.2 percent over June and rose 2.5 percent year on year. Of the total, prices of production means and consumer goods increased 0.1 percent and 0.3 percent, respectively, over the previous month.

During this month, prices of agricultural produce went up 0.3 percent over the previous month and grew 3 percent from a year ago (see graph 3).

Prices of non-ferrous metals climbed 2.1 percent over June and surged 39.6 percent compared with the year-earlier period. Prices of ferrous metals saw a decline of 3 percent from the previous month and decreased 5.7 percent from a year ago. Of the total, prices of iron ore gained 1.1 percent from June but dropped 2 percent from a year ago, while those of rolled steel were 3.9 percent lower than in June and 4.9 percent lower than a year ago.

During this month, energy prices climbed 1.7 percent over the previous month and were 10.4 percent higher than a year ago (see graph 4).

Fixed Assets Investment

From January to July, the aggregate fixed assets investment in urban areas was 4.47 trillion yuan, shooting up 30.5 percent compared with the same period last year, said the National Bureau of Statistics (see graph 5). State-owned and state-holding enterprises and the real estate development sector completed investment of 2.09 trillion yuan and 941.1 billion yuan, increasing 19.7 percent and 24 percent, respectively, year on year.

The investment in central projects was 462 billion yuan, a year-on-year increase of 26 percent, and that in local projects stood at 4.02 trillion yuan, surging 31.1 percent over the year-earlier period.

By industry, the investment in the primary industry, the secondary industry and the tertiary industry reached 45.5 billion yuan, 1.98 trillion yuan and 2.45 trillion yuan, shooting up 39.4 percent, 34.5 percent and 27.4 percent, respectively, year on year.

During the January-July period, the investment by domestic enterprises reached 3.96 trillion yuan, surging 31.5 percent compared with the same period last year. The investment by enterprises with capital from Hong Kong, Macao and Taiwan and foreign-funded enterprises stood at 208.6 billion yuan and 288.8 billion yuan, up 16 percent and 23.6 percent, respectively, year on year.

By the end of July, there were 188,710 projects--each valued at 500,000 yuan or above--under construction, 32,767 more than the figure in the same period last year. The planned investment totaled 17.36 trillion yuan, expanding 24.8 percent year on year. Of the total, the number of newly started projects was 114,931, 20,003 more than a year ago, with the total planned investment of 4.2 trillion yuan, increasing 19.3 percent from a year ago.

From January to July, the paid-in capital totaled 5.28 trillion yuan, shooting up 31.5 percent over the year-earlier period. Of this, domestic loans, foreign investment and self-collected funds were up 30.1 percent, 21.9 percent and 36.1 percent, respectively, year on year.