Financial Performance Remained Stable in 2007

1. Money supply grew moderately

At the end of December 2007, broad money (M2) stood at 40.34 trillion yuan, increasing 16.72 percent year on year, down 1.73 and 0.22 percentage points from the end of November and the end of 2006, respectively. Narrow money (M1) registered at 15.25 trillion yuan, rising 21.01 percent year on year, and down 0.66 percentage points from the end of November, but up 3.53 percentage points from the end of 2006. Cash in circulation (M0) grew 12.05 percent year on year to 3.03 trillion yuan. Net cash injection in 2007 amounted to 330.3 billion yuan, 26.2 billion yuan more than that of 2006.

2. Renminbi deposits grew steadily

At the end of December 2007, outstanding deposits denominated in renminbi and foreign currencies of all financial institutions totaled 40.11 trillion yuan with a year-on-year growth of 15.22 percent. Outstanding renminbi deposits increased 16.07 percent year on year to 38.94 trillion yuan. Renminbi deposits in 2007 surged by 5.39 trillion yuan, a rise of 459.9 billion yuan over the growth in 2006. Household deposits, deposits of non-financial companies and fiscal deposits grew by 1.13 trillion, 3.45 trillion and 663.3 billion yuan, respectively. In December, renminbi deposits rose by 386.4 billion yuan, accelerating by 276.6 billion yuan year on year. At the end of December, outstanding foreign currency deposits of all financial institutions declined 0.94 percent year on year to $159.9 billion. In 2007, foreign currency deposits dropped by $1.5 billion, as compared with the $9.2 billion rise last year. In particular, foreign currency deposits in December fell by $1.7 billion, $700 million less than the decrease during the same period last year.

3. Renminbi loans increased

At the end of December, outstanding loans denominated in renminbi and foreign currencies of financial institutions increased 16.42 percent year on year to 27.77 trillion yuan. Outstanding renminbi loans grew 16.1 percent year on year to 26.17 trillion yuan, an acceleration of 1.03 percentage points from the end of 2006. In 2007, renminbi loans registered an increase of 3.63 trillion yuan, up 448.2 billion yuan year on year on a comparable basis.

By sector, loans to households increased by 1.18 trillion yuan, of which short-term loans grew by 325.7 billion yuan, and long- and medium-term loans by 854.1 billion yuan; loans to non-financial institutions and other sectors expanded by 2.45 trillion yuan, of which short-term loans rose by 1.25 trillion yuan; paper financing dropped by 441.4 billion yuan, and long- and medium-term loans rose by 1.65 trillion yuan. Renminbi loans in December rose by 48.5 billion yuan, decelerating by 172 billion yuan year on year.

The outstanding balance of foreign currency loans from financial institutions totaled $219.8 billion, growing 30.19 percent year on year. In 2007, foreign currency loans increased by $51.1 billion, $32.7 billion more than the growth in 2006. In particular, foreign currency loans in December rose by $900 million, a deceleration of $3.5 billion year on year.

4. Inter-bank market rates dropped

In December, renminbi transactions in the inter-bank market totaled 8.59 trillion yuan with an average daily turnover of 408.8 billion yuan, increasing by 239.3 billion yuan, or 141.1 percent, year on year.

In December, the monthly weighted interest rate for inter-bank borrowing averaged 2.09 percent, down 0.19 and 0.16 percentage points from the previous month and the same period last year, respectively. The monthly weighted interest rate for bond pledges averaged 2.79 percent, down 0.1 percentage point month on month but up 0.78 percentage points year on year.

5. Official foreign exchange reserves increased

At the end of December 2007, official foreign exchange reserves reached $1.53 trillion, registering an increase of 43.32 percent year on year. In 2007, official foreign exchange reserves rose by $461.9 billion, surpassing the growth in 2006 by $214.4 billion. In December, foreign exchange reserves increased by $31.3 billion, $3.8 billion more than the growth in 2006.

($1=7.1998 yuan on January 30)

Source: People's Bank of China

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