Na­tion’s so­cial fi­nanc­ing ex­pands, says PBOC

Sec­tor’s de­vel­op­ment greatly sup­ports re­gional eco­nomic growth

China Daily (Canada) - - BUSINESS - By JIANG XUEQING jiangx­ue­qing@chi­nadaily.com.cn

China’s so­cial fi­nanc­ing has ex­panded rapidly in re­cent years and strongly sup­ported re­gional eco­nomic growth, ac­cord­ing to sta­tis­tics pub­lished by the People’s Bank of China on Thurs­day. In the east­ern re­gion, so­cial fi­nanc­ing hit 9.04 tril­lion yuan ($1.49 tril­lion) in 2013, in­creas­ing by 1.39 tril­lion yuan from 2011. In the cen­tral re­gion, it rose by 1.10 tril­lion yuan to 3.40 tril­lion yuan. And in the western re­gion, it in­creased by 1.29 tril­lion yuan to 3.79 tril­lion yuan.

The so­cial fi­nanc­ing of six ma­jor east­ern prov­inces and cities in­clud­ing Shan­dong, Jiangsu and Zhe­jiang ac­counted for nearly 38 per­cent of the to­tal so­cial fi­nanc­ing in China,

The fig­ures showed the cen­tral and western re­gions have the fastest-de­vel­op­ing economies in China in re­cent years. In the past, when the cen­tral and western re­gions were eco­nom­i­cally un­der­de­vel­oped, many commercial banks used to trans­fer the de­posits they took from these re­gions to the east­ern part of China for bet­ter in­vest­ments.” WEN BIN, SU­PER­VI­SOR, MACROE­CO­NOMIC RE­SEARCH, BANK OF CHINA’S IN­STI­TUTE OF IN­TER­NA­TIONAL FI­NANCE

fall­ing 1.5 per­cent­age points from 2012 and 6.2 per­cent­age points from 2011.

The People’s Bank of China sta­tis­tics re­vealed so­cial fi­nanc­ing is less con­cen­trated in the east and more bal­anced across re­gions than be­fore, said an of­fi­cial in charge of the Sta­tis­tics and Anal­y­sis Depart­ment of the cen­tral bank.

“The fig­ures showed the cen­tral and western re­gions have the fastest-de­vel­op­ing economies in China in re­cent years. In the past, when the cen­tral and western re­gions were eco­nom­i­cally un­der­de­vel­oped, many commercial banks used to trans­fer the de­posits they took from these re­gions to the east­ern part of China for bet­ter in­vest­ments,” said Wen Bin, su­per­vi­sor of macroe­co­nomic re­search at the Bank of China’s In­sti­tute of In­ter­na­tional Fi­nance.

He noted that fi­nan­cial in­sti­tu­tions have played an im­por­tant role in sup­port­ing the eco­nomic de­vel­op­ment in the cen­tral and western re­gions, which re­lied on bank loans more heav­ily than did the east­ern re­gion.

In 2013, new yuan loans ac­counted for nearly 52 per­cent of the so­cial fi­nanc­ing in the cen­tral re­gion and about 55 per­cent in the western re­gion, but less than 50 per­cent in the east­ern re­gion.

Wen said the cen­tral and western re­gions rely more on bank loans be­cause the com­pa­nies in these re­gions are not strong enough to be self-re­liant and the fi­nan­cial mar­kets are not fully de­vel­oped. The east­ern re­gion, on the con­trary, has more va­ri­eties of fi­nan­cial in­sti­tu­tions. Its en­ter­prises have bet­ter pro­duc­tiv­ity and a higher level of tech­nol­ogy.

Last year, di­rect fi­nanc­ing, which com­prises non-fi­nan­cial cor­po­rate bond fi­nanc­ing and do­mes­tic stock fi­nanc­ing, ac­counted for 13.5 per­cent of the so­cial fi­nanc­ing in the east­ern re­gion, ac­cord­ing to the People’s Bank of China.

Build­ing a sys­tem to cal­cu­late so­cial fi­nanc­ing by re­gion will help strengthen the fi­nan­cial in­dus­try’s sup­port for the real econ­omy, pro­mote re­gional eco­nomic re­struc­tur­ing, and nar­row the re­gional dif­fer­ences in eco­nomic de­vel­op­ment, said the of­fi­cial at China’s cen­tral bank.

“By mon­i­tor­ing the sta­tis­tics, we will de­tect the prob­lems and risks in re­gional fi­nan­cial de­vel­op­ment. For ex­am­ple, if non-fi­nan­cial in­sti­tu­tion loans take a large pro­por­tion of the so­cial fi­nanc­ing and ex­pand rapidly in some re­gions, we will pay close at­ten­tion to pos­si­ble fi­nan­cial risks,” said the of­fi­cial.

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