By sector, loans to households increased by 460.2 billion yuan ($67 billion), down 213.9 billion yuan ($31 billion) year on year. Loans to non-financial companies and other sectors expanded by 1.9923 trillion yuan ($292 billion), 124 billion yuan ($18 billion) more than the amount in the same period last year.

At the end of June, the outstanding foreign currency loans at financial institutions totaled $275.3 billion, rising 48.63 percent year on year.

Inter-bank market

Inter-bank market rates rose slightly. In June 2008, renminbi transactions in the inter-bank lending market amounted to 8.31 trillion yuan ($1.22 trillion). The average daily turnover reached 415.3 billion yuan ($61 billion), an increase of 55.9 percent.

In June, the monthly weighted interest rate for inter-bank lending averaged 3.07 percent, up 0.68 percentage points from the same period last year. The monthly weighted interest rate for bond-pledged repo transactions averaged 3.08 percent, up 0.61 percentage points year on year.

Foreign reserves

At the end of June, official foreign exchange reserves reached $1.8088 trillion, registering an increase of 35.73 percent year on year. In the first half of this year, official foreign exchange reserves rose by $280.6 billion, up $14.3 billion year on year. On June 30, the renminbi exchange rate stood at 6.8591 to the U.S. dollar.

(Source: People's Bank of China)

SOE Profits Down

China's centrally administered state-owned enterprises (SOEs) had total profit of 425.6 billion yuan ($62.3 billion) in the first half of this year, down 10.3 percent from the year-earlier period.

Profits were dragged down by heavy losses in the petroleum and petrochemical and power industries, according to the State-owned Assets Supervision and Administration Commission. If the losses in the two industries were excluded, the SOEs' profit in the first half actually increased 22.6 percent year on year.

The government capped the prices of electricity and refined oil products. But electricity, coal and crude oil prices surged in global markets during the same period. The Central Government subsidizes oil refineries annually. Power industry insiders are now calling on the government to subsidize power companies or raise electricity prices to help prevent further losses of their companies. Four of the top five state-owned power plants suffered losses in the first half.

Some sectors reported a more than 30-percent increase in profit in the first half, including auto manufacturers, coal producers and military suppliers, whose profit surged 70.3 percent, 44.4 percent and 33.8 percent, respectively.

Gloomy Fund Performance

The aggregate assets of mutual fund companies stood at 2.1 trillion yuan ($307 billion), down 20.77 percent in the second quarter compared with the first quarter, according to Xinhua News Agency. Mutual fund companies were "prudently optimistic" about the financial market in the next quarter, the report said.

Equity funds suffered the biggest losses in the second quarter, mainly because of sluggish stock market performance. Their total assets decreased 22.43 percent from the first quarter, and investors redeemed about 78 billion shares.

Liu Jiazhang, an analyst at China Minzu Securities Co. Ltd., told Xinhua that fund managers shorted their stocks in the second quarter but maintained long positions in shares of new energy, growth enterprise board, and resource substitute funds.

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