With the continuous increase of financial support for steady growth, the scale of new RMB loans in 2021 exceeded that of the previous year, and the growth rate of social finance hit the bottom and stabilized.
On January 12, the latest financial data released by the people’s Bank of China showed that in December 2021, 1.13 trillion yuan of new credit and 2.37 trillion yuan of new social finance were added; In the whole year, the new credit was 19.95 trillion yuan, and the growth rate of credit balance was 11.6%; In the whole year, 31.35 trillion yuan of social finance was added, and the stock growth rate of social finance scale was 10.3%.
On the same day, the National Bureau of statistics released CPI (consumer price index) and PPI (producer price index) data for December 2021 and the whole year. In December, CPI and PPI showed a “double drop” trend, providing good conditions for steady growth.
Among them, CPI increased by 1.5% year-on-year, down 0.8 percentage points from the previous month, and increased by 0.9% in 2021; PPI increased by 10.3% year-on-year, down 2.6 percentage points from the previous month, and increased by 8.1% for the whole year. The scissors difference between PPI and CPI also fell to 8.8 percentage points, 1.8 percentage points narrower than the previous month.
According to the analysis of insiders, with the continuous implementation of the policy of ensuring supply and stabilizing prices and the peak decline of commodity prices, it is expected that the PPI will continue to fall in 2022, the CPI center may rise, China’s inflation as a whole will remain at a moderate level, and the constraints on monetary policy are limited. Macro policies will strengthen cross cyclical and counter cyclical regulation and promote economic operation within a reasonable range.
the growth rate of social finance hit the bottom and stabilized
According to preliminary statistics, the cumulative increment of social financing scale in 2021 is 31.35 trillion yuan, 3.44 trillion yuan less than that in 2020 and 5.68 trillion yuan more than that in 2019. In December, the increment of social finance scale was 2.37 trillion yuan, 720.6 billion yuan more than the same period of last year and 166.9 billion yuan more than the same period of 2019.
“The small year-on-year increase in the scale of social financing in 2021 is mainly affected by the small increase in off balance sheet financing and direct financing. However, compared with normal years, it is the second highest in history, and China’s financing environment remains moderately loose.” Financial market analyst Zhou Maohua said.
Specifically, RMB loans to the real economy increased by 19.94 trillion yuan in 2021, a year-on-year decrease of 90.7 billion yuan. The increase in the scale of social finance was mainly dragged down by three items: trust loans decreased by 2.01 trillion yuan, an increase of 905.4 billion yuan year-on-year; The net financing of corporate bonds was 3.29 trillion yuan, a year-on-year decrease of 1.09 trillion yuan; The net financing of government bonds was 7.02 trillion yuan, a year-on-year decrease of 1.31 trillion yuan.
Wen bin, chief researcher of China China Minsheng Banking Corp.Ltd(600016) , pointed out that structurally, RMB loans to the real economy accounted for 63.6% of social finance in the same period in 2021, an increase of 6 percentage points over the previous year. Finance further returned to its origin, implemented the policy requirements of serving the real economy, and continued to increase credit support.
From the perspective of stock growth of social finance scale, although the growth rate of 10.29% at the end of December was lower than the high point in the year and the same period in 2020, it was further warmer than 10.11% last month. Wang Yunjin, senior researcher of Zhixin Investment Research Institute, believes that with the further clarification of the policy goal of stable growth, the central bank issued a number of policies in the fourth quarter of last year to guide financial institutions to increase their support for physical enterprises, especially small and medium-sized micro enterprises, carbon emission reduction, scientific and technological innovation and other key areas. In addition, the financial force and the pre issuance of government bonds have reached the bottom and stabilized the growth rate of social finance
data source: Central Bank
the new credit increase in the whole year was slightly higher than that in the previous year
In 2021, RMB loans increased by 19.95 trillion yuan, an increase of 315 billion yuan year-on-year, which is roughly equivalent to market expectations.
In terms of structure, household loans increased by 7.92 trillion yuan, of which short-term loans increased by 1.84 trillion yuan and medium and long-term loans increased by 6.08 trillion yuan; Loans to enterprises (Institutions) increased by 12.02 trillion yuan, including 946.8 billion yuan in short-term loans and 9.23 trillion yuan in medium and long-term loans.
However, the medium and long-term loans of enterprises (Institutions) increased by 339.3 billion yuan in December, slightly lower than that of the previous month, indicating that the credit demand of enterprises still needs to be further warmed up.
Meanwhile, the credit growth rate dropped again in December, and the financing demand showed a seasonal trend. New loans slowed down in the month, with RMB loans increasing by 1.13 trillion yuan, a year-on-year decrease of 123.4 billion yuan. However, this scale is basically equivalent to the new loans in December 2019 and still belongs to the normal range. At the end of the month, the balance of RMB loans increased by 11.6% year-on-year, 0.1 and 1.2 percentage points lower than that at the end of last month and the same period of last year respectively.
Zhou Maohua believes that this is mainly affected by seasonal factors and the “active preparation” of banks at the end of the year.
It is worth noting that bill financing increased by 1.5 trillion yuan in 2021. Among them, the new bill financing in December was 408.7 billion yuan, higher than the increase in the same period in 2020. Wang Yunjin believes that this is mainly due to the “impulse” of credit lines of financial institutions at the end of the year and the release of long-term funds by reducing reserve requirements.
In addition, in December 2021, the central bank comprehensively reduced the reserve requirement by 0.5 percentage points, releasing about 1.2 trillion long-term funds. After the RRR reduction, the increase of deposits superimposed on the increase of fiscal expenditure, which promoted the growth rate of broad money (M2) to increase significantly.
The data show that at the end of December, the M2 balance was 238.29 trillion yuan, an increase of 9% year-on-year, 0.5 percentage points higher than that at the end of November, the highest since April and 1.1 percentage points lower than that in the same period in 2020; The balance of narrow money (M1) was 64.74 trillion yuan, a year-on-year increase of 3.5%, 0.5 percentage points higher than that at the end of November and 5.1 percentage points lower than that in the same period in 2020.
“loose” currency helps steady growth
With repeated outbreaks, global inflation and tightening monetary policies in the United States and Europe, China’s economic growth will face many challenges in 2022, and finance will continue to play a positive role in promoting steady growth.
In fact, the Central Bank of China has given the answer to how monetary policy underpins economic growth. The fourth quarter regular meeting of the monetary policy committee of the people’s Bank of China in 2021 set the tone: prudent monetary policy should be flexible and appropriate, enhance foresight, accuracy and autonomy, give full play to the dual functions of the total amount and structure of monetary policy tools, be more proactive and promising, increase support for the real economy, maintain reasonable and sufficient liquidity, and enhance the stability of the growth of total credit, We will maintain a basic match between the growth of money supply and the scale of social financing and economic growth, maintain a basically stable macro leverage ratio, enhance the resilience of economic development and stabilize the macro-economic market.
The central economic work conference requires that the economic work in 2022 should be stable and seek progress while maintaining stability, the macro policy should be appropriately advanced, and the cross cyclical and counter cyclical policies should be organically combined. Monetary policy will play an important role in supporting “stable growth”.
In the early stage, the central bank has implemented the follow-up arrangements of reducing the reserve requirement, reducing the small refinancing interest rate for supporting agriculture, guiding banks to reduce the one-year LPR quotation, launching carbon emission reduction support tools and special refinancing to support the clean and efficient utilization of coal, and deploying two monetary policy tools directly to the real economy.
Wen bin believes that in the future, the above policies will continue to play an effective role, and monetary and credit policies will continue to increase precise support for key areas and weak links such as small and medium-sized micro enterprises, manufacturing, green development, scientific and technological innovation and rural revitalization, so as to promote the operation of the national economy in a reasonable range.
“The Fed’s policy tightening is a consensus, but there is still uncertainty about when to increase interest rates, how many times to increase interest rates, and when to shrink the table. There are also unexpected risks. Therefore, we should also be prepared to deal with the shift of the Fed’s monetary policy and provide a safe and stable financial environment for economic recovery.” Wen Bin said.
Zhou Maohua predicted that social finance and credit will usher in a “good start”. First, China’s counter cyclical and cross cyclical policies. RRR reduction and structural instrument support to enhance the lending power of banks and financial institutions; Second, the issuance of local government special bonds was advanced; Third, with the gradual recovery of real estate and the moderate development of infrastructure weaknesses, it is expected to drive the credit demand.
Wang Yunjin believes that the prudent monetary policy may still maintain loose operation in 2022, but there is no room and conditions for substantial easing; In the first half of the year, the reserve requirement may be reduced slightly once or twice; Open market operations continue to maintain reasonable and sufficient market liquidity, and maintain foresight and accuracy; LPR is expected to decrease slightly again; The effect of structural policies such as carbon emission reduction support tools on expanding credit, reducing credit costs and promoting credit growth will be further apparent.
At the same time, the current decline in PPI and CPI also provides better conditions for accelerating steady growth.
With regard to the price trend in 2022, the industry believes that affected by factors such as the gradual upward cycle of pork prices and the transmission of bulk commodity prices, the price increase may expand, but it will still be in a reasonable range. The mismatch between supply and demand of international commodities caused by the epidemic will be gradually alleviated, the superposition base effect will appear, and PPI will show a trend of “high before low”.
However, the impact of the global epidemic has not yet ended, global supply chain problems are still ongoing, and the number of days with abnormal climate has increased significantly. It is necessary to be vigilant against imported inflation of energy and some raw materials.
“In the next stage, global inflation is expected to fall, but there is still uncertainty; due to the base effect, the continuous implementation of the policy of ensuring supply and stabilizing prices and the peak fall of commodity prices in China, it is expected that PPI will continue to fall, CPI center may rise, inflation as a whole remains moderate and level, with limited constraints on monetary policy.” Wen Bin said that this year’s economic work has taken the lead in stability and the tone of seeking progress in stability has been clear. Macro policies will strengthen cross cyclical and counter cyclical adjustment, and active policies in all aspects will be introduced, implemented and pushed forward to promote economic operation within a reasonable range.
