Financialstatistics of the 1^st quarter of 2004 indicate, the People's Bank ofChina continuously conducted sound monetary policy and strengthened its preemptiveand fine-tuning policy measures as well as open market operations to controlthe growth of base money and guide appropriate expansion of money and credit.Financial industry performance remained stable in the first quarter,contributing to the steady, rapid and healthy development of the Chineseeconomy.

 

1.      Money supply expanded relatively fast, ensuring a favorable monetarysituation

Atend-March, broad money (M2) reached RMB23.2 trillion yuan, increasing by 19.1 percentYOY, 0.5 percentage points lower than the growth in 2003. Narrow money (M1) reachedRMB8.6 trillion yuan, increasing by 20.1 percent, which was 1.4 percentagepoints higher compared with last year. Cash in circulation (M0) reached RMB1.9trillion yuan, increasing year-on-year by 12.8 percent. In the first quarter, netcash withdrawal accumulated to RMB44.9 billion yuan, RMB22.7 billion yuan morethan the same period of 2003. M2 and M1 both far outgrew the sum of GDP and CPIgrowth. In general, monetary situation remained favorable.

 

2.      Deposits increased gradually, indicating adequate liquidityof the enterprises

Outstandingdeposits denominated in both local and foreign currencies in all financialinstitutions reached RMB23.3 trillion yuan at end-March, increasing by 19.6percent from a year earlier, with cumulative increase during the first quarterof 2004 rising by RMB108.7 billion yuan year-on-year to RMB1.2 trillion yuan.RMB deposits reached RMB22.1 trillion yuan, increasing by 21 percent, which was0.1 percentage points lower compared with last year, with cumulative increase ofthe first three months growing by RMB112.8 billion yuan to RMB1.3 trillionyuan. In particular, corporate deposits stood at RMB7.5 trillion yuan,increasing by 21.7 percent, 2.3 percentage points higher than the growth recordedfor 2003, with cumulative increase of the first three months growing by RMB28.4billion yuan to RMB200.3 billion yuan. The rapid growth of corporate depositsindicated adequate liquidity of the enterprises. Outstanding household savingsdeposits reached RMB11.2 trillion yuan, increasing by 18.3 percent, 0.9percentage points lower than 2003, with cumulative increase in the first threemonths growing by RMB66.4 billion yuan to RMB824.6 billion yuan. In particular,cumulative increase of time deposits soared by RMB0.5 billion yuan to RMB507.3billion yuan; cumulative increase of demand deposits grew by RMB65.9 billionyuan to RMB317.4 billion yuan. Outstanding foreign currency deposits offinancial institutions decreased by 1.4 percent to USD146.8 billion, whiledeposits of enterprises and public institutions increased by 5.9 percent toUSD52 billion household deposits went down by 8.3 percent to USD82.6 billion.

 

3.      Bank loans increased rapidly with loan structure furtheroptimized

Outstandingloans denominated in both local and foreign currencies in all financialinstitutions increased by 20.7 percent to RMB17.9 trillion yuan. Cumulativeincrease of loans in the first quarter climbed by RMB59.6 billion yuan toRMB913.1 billion yuan. Outstanding RMB loans reached RMB16.7 trillion yuan,increasing by 20.1 percent, which was 1 percentage point lower than the growth recordedfor 2003. Cumulative increase of loans in March grew by RMB24.7 billion yuan year-on-yearto RMB835.1 billion yuan. In terms of loan structure, the increased short-termloans grew by RMB42.3 billion yuan to RMB397.5 billion yuan. In particular,increase of loans to industrial sectors totaled RMB66.5 billion yuan, increaseof loans to agricultural sector and township and village enterprises grew byRMB35.2 billion yuan and RMB6.3 billion yuan respectively, to RMB120.3 billionyuan and RMB38.5 billion yuan. Medium-term working capital loans increased byRMB14 billion yuan, RMB20.7 billion yuan lower than the growth recorded a yearearlier. Medium and long-term loans accelerated by RMB69.9 billion yuanyear-on-year to RMB358.7 billion yuan. In particular, increase of capitalconstruction loans rose by RMB33.7 billion yuan to RMB170 billion yuan, mediumand long-term consumer credit by RMB7.7 billion yuan to RMB104.3 billion yuan,paper financing down by RMB79.2 billion yuan to RMB50.9 billion yuan. Outstandingforeign currency loans increased year-on-year by 29.9 percent to USD140.2billion, accelerating by USD4.2 billion to USD9.4 billion in the first quarter.In particular, short-term foreign exchange loans grew by 51.5 percent toUSD50.5 billion, with cumulative increase in the first quarter accelerating byUSD2.2 billion to USD4.6 billion; medium and long-term foreign exchange loans expandedby 27 percent to USD48.8 billion, with cumulative increase accelerating byUSD1.1 billion to USD2.1 billion. In terms of loan structure, loans extended tosupport agriculture, capital construction, and consumer credit increasedrelatively fast, representing a further optimized loan structure.

 

4.      Foreign exchange reserves increased and RMB exchange rateremained stable

At the end of March, official foreignexchange reserves reached USD439.8 billion, up 39.2 percent. Cumulativeincrease of the first quarter grew by USD6.9 billion year-on-year to USD36.5billion. RMB exchange rate remained stable, being at 8.2771 yuan per US dollar.

 

 

 

Sources and Uses of Renminbi and Foreign Exchange Credit Funds of Financial Institutions
	2004-03	Unit:RMB100million yuan
Funds Sources	Balance	Funds Uses	Balance
I. Total Deposits	232710.43	I. Total Loans	179044.51
1.Deposits of Enterprises	79328.84	1.Short-term Loans	91424.18
(1)Demand Deposits	55627.84	2.Long and Medium -term Loans	71415.55
(2)Time Deposits	23701.00	3.Trust Loans	2457.86
2.Savings Deposits	118706.74	4.Paper Financing	10108.53
(1)Demand Deposits	39462.41	5.Other Loans	3638.39
(2)Time Deposits	79244.33	II. Portfolio Investments	38462.27
3.Trust Deposits	2651.97	III. Position for  Bullion&Silver Purchase	337.24
4.Other Deposits	32022.88	IV . Assets in International  Financial Institutions	885.84
II. Liabilities to International  Financial Institutions	517.66
III. Other Items	-14498.23
Total	218729.86	Total	218729.86

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