SCIO press briefing on H1 economic performance
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E-mail China.org.cn, July 15, 2016
Financial Times:
My question is about loans. We know that central government-owned enterprises have quite a lot of loans, especially in the coal industry, while private enterprises have to cope with high interest rates in non-banking financial institutions. Will loans impact the GDP growth in the second half of this year? My second question relates to the fact that I heard the financial industry constitutes 20 percent of the (growth of) tertiary industries; is that true? If so, will the growth rate of the tertiary industry be influenced if loan rates decline? Thank you.
Sheng Laiyun:
Thank you for your questions. I want to first of all answer your second question about the impact of the financial sector on the GDP, which has drawn attention. Based on the data of the first half of this year, the financial industry has had less contribution to the GDP growth (than previously). The growth rate of the financial industry in the first six months is 6.7 percent at constant prices, declining slightly from last year. We all know that the stock market was very active last year, and thegrowth rate of M2 this year contracted nearly 2 percent more than last year; therefore, the growth rate of the financial industry declined, and its contribution to GDP growth declined as well. Its contribution to GDP growth was not 20 percent as you said, but around 9 percent during the first six months.
As to loans for central government-owned and private enterprises, there are indeed the phenomena you mentioned. Central government-owned enterprises can more easily get loans as they have more solid guarantees. Looking at the structure of loans, we find that loan and investment growth rates of central government-owned enterprises are better than that of private enterprises. Many of the private enterprises are small businesses with inadequate guarantees. Moreover, around 50 percent of investment in private enterprises is from the manufacturing sector, whose market environment -- (sluggish) due to ongoing adjustment -- is influencing its readiness to enlarge investment. Therefore, there are fewer loans in private enterprises and they have to handle the higher expenses and difficulty of obtaining loans. I want to tell you that the related departments have been fully aware of this structural problem and are speeding up the related reforms, for instance, while we maintain a prudent monetary policy, we are also stepping up structural adjustment and targeted and discretionary macro regulation. These measures will better lead loans or credit to go into the real economy. I believe these problems (you mentioned) will be properly resolved, as long as we pursue the guidance of these policies, structural reforms, especially the supply-side reforms, and specific reform in state-owned enterprises. As to the specifics, I think you may get more information from the financial department than from me. Thank you.
Xi Yanchun:
As time is limited, a number of journalists have not been able to ask questions today. You can reach out to the news office of the National Bureau of Statistics. Thank you, Mr. Sheng, and thank all of our friends from the press. This is the end of today's press conference.
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