On January 18, the New Office of the State Council held a press conference on financial statistics in 2021, at which Liu Guoqiang, vice president of the Chinese Bank, introduced several aspects of the work that the People's Bank of China will focus on in the next stage:
The first is to maintain the steady growth of the total amount of monetary credit. Comprehensively use a variety of monetary policy tools to maintain reasonable and sufficient liquidity, enhance the stability of the growth of total credit, guide financial institutions to effectively expand credit delivery, and maintain the growth rate of money supply and social financing scale to basically match the nominal economic growth rate.
The second is to maintain the steady optimization of the credit structure. Structural monetary policy tools should actively do a good job of "addition", implement market-oriented policy tools to support small and micro enterprises, make good use of carbon emission reduction support tools and support special refinancing for the clean and efficient use of coal, guide financial institutions to increase credit to areas with slow credit growth, and optimize the structure. Precise efforts will be made to increase credit support for key areas and weak links.
The third is to keep the comprehensive financing cost of enterprises stable and decreasing. Improve the formation and transmission mechanism of market-oriented interest rates, give play to the efficiency of the reform of quoted interest rates in the loan market, stabilize the cost of bank liabilities, promote the stability and reduction of comprehensive financing costs of enterprises, and promote the concession of the financial system to the real economy.
The fourth is to maintain the basic stability of the RMB exchange rate at a reasonable and balanced level. Let market supply and demand play a decisive role in the formation of exchange rates, and give play to the function of exchange rate adjustment macroeconomic and balance of payments automatic stabilizer. There are many factors affecting the exchange rate, the exchange rate is inevitable, two-way fluctuations are the norm, enterprises and financial institutions should establish the concept of "risk neutrality", and financial institutions should actively provide exchange rate risk management services for small and medium-sized enterprises to reduce the exchange rate hedging costs of small and medium-sized enterprises. Maintaining the basic stability of the RMB exchange rate at a reasonable equilibrium level is the goal, and the exchange rate may deviate from the equilibrium level in the short term, but in the medium and long term, market factors and policy factors will correct the exchange rate deviation.
Bloomberg News: There are two questions, the first question is that there is a relatively large gap in interest rates between China and the United States, will this gap affect the exchange rate? How will China respond to this situation? The second question is whether the demand for corporate borrowing is weak now? Based on the December data, we found that interbanks as well as banks are making some short-term loans to businesses, does this mean that the borrowing demand of companies is becoming weak? Thank you.
Sun Guofeng, director of the Monetary Policy Department of the Chinese Min min bank: On your first question, China implements a managed floating exchange rate system based on market supply and demand, adjusted with reference to a basket of currencies. In the future, the trend of the RMB exchange rate is affected by many factors such as market supply and demand, international market trends, market supply and demand play a decisive role in the formation of the RMB exchange rate, the changes in the RMB exchange rate are mainly determined by the market, both may appreciate, may also depreciate, elasticity is enhanced, two-way fluctuations, which is the RMB exchange rate to play the macroeconomic and balance of payments automatic stabilizer function of the embodiment, but also conducive to promoting the balance of internal equilibrium and external equilibrium. With the changes in the international financial market situation, cross-border capital flows may fluctuate to a certain extent, and the mainland, as a super-large economy, has developed steadily in its domestic economy, providing a good foundation for maintaining internal and external equilibrium.
Overall, cross-border financial flows will remain dynamic and balanced. In the next step, the People's Bank of China will adhere to the steady and prudent monetary policy, be flexible and moderate, take advantage of ourselves, give play to the function of the RMB exchange rate to adjust the macro-economy and the automatic stabilizer of the balance of payments, strengthen the macro-prudential management of cross-border capital flows, strengthen the management of expectations, guide enterprises and financial institutions to establish the concept of "risk neutrality", handle the balance of internal equilibrium and external equilibrium, and maintain the basic stability of the RMB exchange rate at a reasonable equilibrium level.
On the second question, since 2021, the prudent monetary policy has been flexible and precise, reasonable and moderate, and in the face of economic downward pressure brought about by demand contraction, supply shocks, and weak expectations, the People's Bank of China has made forward-looking efforts since the second half of 2021 to increase financial support for the real economy by reducing the RRR, increasing the amount of small refinancing, launching carbon emission reduction support tools and supporting the clean and efficient use of coal. Since December, in accordance with the deployment of the Central Economic Work Conference, the People's Bank of China has further increased its cross-cyclical adjustment efforts, done a good job of cross-annual policy convergence, and once again reduced the RRR by 0.5 percentage points to guide financial institutions to enhance the stability of total credit growth. The 1-year LPR fell by 5 basis points, actively used structural monetary policy tools to do a good job of "addition", and implemented the continuous conversion of two direct tools. These measures will not only help stabilize the total amount of credit in 2021, optimize the credit structure, but also help to help make a smooth start to 2022 across cycles. In 2021, the new loans were 19.95 trillion yuan, an increase of 315 billion yuan year-on-year, and on the basis of the new loans in 2020 and the year-on-year increase of 2.8 trillion yuan compared with 2019, the financial support for the real economy continued to increase. Because loans in 2020 have increased significantly more than in 2019, 2021 is a further year-on-year increase on this basis. In December 2021, the new loans in the month of December 2021 were 1.13 trillion yuan, a slight increase year-on-year, mainly due to the larger credit investment of financial institutions during the epidemic in 2020, and the loan base was relatively high. From the perspective of historical laws, December is often a small month for loans, and the average new loan from 2016 to December 2019 is less than 1 trillion yuan, so the strength of loans in December 2021 is still increased compared with the years before the epidemic, reflecting the effectiveness of the policy. Since the beginning of this year, the People's Bank of China has strengthened cross-cycle adjustment, increased liquidity investment, and promoted medium-term lending facilities and open market operations to reduce the bid interest rate by 10 basis points, which will help stimulate the financing needs of market players and enhance the stability of total credit growth.
In the next step, the People's Bank of China will adhere to the principle of being steady, flexible and moderate in a prudent monetary policy, increase the intensity of cross-cycle adjustment, give full play to the dual functions of monetary policy total and structure, maintain reasonable and sufficient liquidity, and guide financial institutions to effectively expand credit delivery. With the emergence and accumulation of various policy effects issued by the People's Bank of China, financial institutions will increase their lending to the real economy, the stability of the growth of total credit will be further enhanced, credit resources will flow more to key areas and weak links such as small and micro enterprises, scientific and technological innovation, and green development, and the money supply and social financing scale will be basically matched with the nominal economic growth rate. Thank you.
Ruan Jianhong, director of the Survey and Statistics Department of Chinese Min Bank: The second question raised by this reporter just now, I can add some data.
At the end of last year, the growth rate of the balance of local and foreign currency loans of enterprises and institutions was 11%, 1.4 percentage points lower than the previous year, but 0.5 percentage points higher than the end of 2019, and the new loan increase of enterprises and institutions in the whole year was 12.14 trillion yuan, which was basically the same as the increase of the previous year. Among them, medium- and long-term loans increased by 9.24 trillion yuan, an increase of 464.2 billion yuan year-on-year.
Let's take a look at the actual investment direction of medium- and long-term loans, from the actual investment situation, the support of financial institutions for medium- and long-term funds in key areas is still relatively stable. Specifically:
First, medium- and long-term loans to the manufacturing industry have maintained rapid growth. At the end of 2021, medium- and long-term loans in the manufacturing industry increased by 31.8%, 18.1 percentage points higher than the growth rate of medium- and long-term loans in all industries, and new manufacturing loans in the whole year were 1.67 trillion yuan, an increase of 300.5 billion yuan year-on-year. Among them, the growth rate of medium- and long-term loans in high-tech manufacturing is 32.8%, with an increase of 364.3 billion yuan in the whole year.
Second, the growth rate of medium- and long-term loans in the industry has increased more. At the end of 2021, the growth of medium- and long-term loans to the industry was 22.6%, 2.6 percentage points higher than the end of the previous year, and the annual increase was 2.49 trillion yuan, an increase of 650.3 billion yuan year-on-year.
Third, medium- and long-term loans in the infrastructure industry have grown steadily and rapidly. At the end of 2021, the growth rate of medium- and long-term infrastructure loans was 15.3%, 1.1 percentage points higher than the end of the previous year, and the annual increase was 3.82 trillion yuan, an increase of 734.6 billion yuan year-on-year.
Fourth, medium- and long-term loans in the service industry, excluding the real estate industry, still maintain a relatively rapid growth level. At the end of 2021, the growth rate of medium- and long-term loans in the service industry excluding the real estate industry was 15.4%, 1.7 percentage points higher than the growth rate of medium- and long-term loans in all industries, and 5 trillion yuan was added in the whole year, an increase of 261.8 billion yuan year-on-year. Thank you.
Liu Guoqiang: On the first exchange rate issue, I would like to add a few more words for your reference. Now it is becoming more and more difficult to observe the exchange rate, for example, the interaction between the original exchange rate between the renminbi and the dollar is relatively regular, and there is often a seesaw, that is, the dollar rises a little, and the renminbi is relatively depreciated. In 2021, there have been several times when the dollar has strengthened and the renminbi has become stronger. This seems incomprehensible, and short-term observations are more difficult. But this is reasonable, for example, the economic growth last year was relatively fast, the trade surplus is relatively large, especially in the early stage, everyone is expected to be better, so it supports the strengthening of the renminbi, which leads to a short-term situation where the dollar is strong and the renminbi is stronger. However, if this time is stretched into a stage, it is still more reasonable, the overall is still reasonable and balanced, two-way fluctuations, so from a longer period point of view does not change any law, but short-term measurement, short-term forecast is more difficult, the long-term is still a relatively stable.
In addition, China is a big country, and sustained unilateral appreciation or continuous unilateral depreciation is difficult to appear in a big country, and it is even more unlikely to occur in China. Because our macro-control is measured, we do not have flood irrigation, or in accordance with economic laws, the micro market mechanism is also more effective, although there may be some interference factors, but on the whole is still reasonable and balanced, basically stable. Thank you.