Money and Credit Recorded Rational Growth and Financial System Performed Stably   In 2008, in accordance with the overall arrangements of the CPC Central Committee and the State Council, the PBC took a series of flexible and effective policy measures in calm response to the volatilities in economic situations both home and abroad. At the same time, it adjusted timely the orientation, emphasis and intensity of monetary policy and enhanced the foresight, targeting and effectiveness of macro regulation. In general, money and credit recorded rational growth throughout the year, the financial system performed stably and the value of the RMB was basically stable. All these contributed to the stable and relatively fast growth of the national economy.   1. Money supply (M2) grew 17.82% At end-December 2008, broad money (M2) stood at RMB 47.52 trillion, increasing 17.82% year on year, up 1.08 and 3.02 percentage points from the end of last year and the end of last month respectively. Narrow money (M1) registered RMB 16.62 trillion, rising 9.06% year on year, down 11.99 percentage points from the end of last year but up 2.26 percentage points from the end of last month. Cash in circulation (M0) grew 12.65% year on year to RMB 3.42 trillion. Net cash injection in the year totaled RMB 384.4 billion, up RMB 54.1 billion year on year. 2. RMB loans increased 18.76% At end-December 2008, outstanding RMB and foreign currency loans of financial institutions totaled RMB 32.01 trillion, rising 17.95% year on year on a comparable basis. Outstanding RMB loans reached RMB 30.35 trillion, up 18.76% year on year on a comparable basis, accelerating by 2.66 percentage points compared with that at the end of last year. In 2008, RMB loans increased by RMB 4.91 trillion on a comparable basis, up RMB 1.28 trillion year on year. By sector, loans to households rose by RMB 701 billion, with short-term loans and long and medium-term loans increasing by RMB 290.7 billion and 410.3 billion respectively. Loans to non-financial companies and other sectors increased by RMB 4.21 trillion. In breakdown, short-term loans, bill financing and long and medium-term loans increased by RMB 1.33 trillion, 646.1 billion and 2.11 trillion respectively. In December, RMB loans rose by RMB 771.8 billion, accelerating by RMB 723.3 billion year on year. At end-December, outstanding foreign currency loans of financial institutions totaled USD 243.8 billion, up 11.89% year on year. Foreign currency loans rose by USD 25.9 billion in 2008, down USD 25.2 billion year on year. In particular, foreign currency loans decreased by USD 4.6 billion in December, as compared with the USD 900 million increase in the same period last year.   3. RMB deposits grew 19.73% At end-December 2008, outstanding RMB and foreign currency deposits of financial institutions totaled RMB 47.84 trillion with a year-on-year growth of 19.30%. Outstanding RMB deposits increased 19.73% year on year to RMB 46.62 trillion. RMB deposits registered an increase of RMB 7.69 trillion in 2008, up RMB 2.3 trillion year on year. In breakdown, household deposits, deposits of non-financial companies and fiscal deposits grew by RMB 4.63 trillion, 2.87 trillion and 26.9 billion respectively. In December, RMB deposits recorded a RMB 383.4 billion increase, RMB 3 billion less than the growth in the same period last year. At end-December, outstanding foreign currency deposits of financial institutions rose 12.01% year on year to USD 179.1 billion. Foreign currency deposits grew by USD 18.3 billion in 2008, as compared with the USD 1.5 billion slide in the same period last year. In particular, foreign currency deposits rose by USD 4.9 billion in December, as compared with the USD 1.7 billion drop in the same period last year.   4. Inter-bank lending market rates fell In December, RMB transactions in the inter-bank lending market amounted to RMB 11.76 trillion. The average daily turnover reached RMB 511.2 billion, increasing by 25.0%, or RMB 102.3 billion, year on year. In December, the monthly weighted interest rate for inter-bank lending averaged 1.24%, down 1.06 and 0.85 percentage points from last month and the same period last year respectively. The monthly weighted interest rate for bond pledged repo averaged 1.22%, down 1.06 percentage points month on month and 1.57 percentage points year on year.   5.    Official foreign exchange reserve increased At end-December 2008, China´s foreign exchange reserve reached USD 1.95 trillion, registering an increase of 27.34% year on year. In 2008, the official foreign exchange reserve rose by USD 417.8 billion, down USD 44.1 billion year on year. In December, the foreign exchange reserve increased by USD 61.3 billion, USD 30 billion more than the growth in the same period last year. At end-December, the RMB exchange rate stood at RMB 6.8346 per USD.    Sources and Uses of RMB and Foreign Currency Credit Funds of Financial Institutions (By Sector)                             December 2008                   Unit: RMB100 million Fund Source Balance Fund Use Balance I. Total Deposits 478444.21 I. Total Loans 320128.54   1.Household Deposits 225640.74   1.Loans to Households 57084.89   (1) Demand Deposits 79533.45 (1) Consumer Loans 37236.70   (2) Time Deposits 146107.29       Short-term Consumer Loans 4154.38   2.Deposits of Non-financial Institutions 224488.54       Long and Medium¨Cterm Consumer Loans 33082.32 (1) Deposits of Enterprises and Public Institutions 202525.77   (2) Business Loans 19848.19   (2)  Deposits of Government Agencies and Organizations 21962.77       Short-term Business Loans 14554.82   3.Fiscal Deposits 18040.04 of which: Loans to Farmers 11971.73   4.Other Deposits 10274.89      Long and Medium-term Business Loans 5293.37 II. Liabilities to International Financial Institutions 732.59   2.Loans to Non-financial  Institutions and Other Sectors 263043.65 III. Other Items -76863.25   (1) Short-term Loans and Bill Financing 128894.94     Short-term Loans 109580.79               Bill Financing 19314.15       (2) Long and Medium-term Loans 121913.01       (3)  Other Loans 12235.70     II. Portfolio and Investment 80907.04     III. Purchase of Gold and Silver 337.24     IV. Assets in International Financial Institutions 940.73         Total 402313.55 Total 402313.55 Notes: 1. Financial institutions referred to in this table include the People's Bank of China, policy banks, state-owned commercial banks, other commercial banks, urban commercial banks, rural commercial banks, rural cooperative banks, urban credit cooperatives, rural credit cooperatives, finance companies, trust and investment companies, leasing companies, Postal Savings Bank and foreign-funded financial institutions. 2. Household deposits refer to household savings deposits; deposits of non-financial institutions include deposits of enterprises and public institutions and deposits of government agencies and organizations; other deposits include insurance companies´ deposits in the banking sector and overseas non-resident deposits; loans to households include consumer loans and business loans; loans to non-financial institutions and other sectors include loans to non-financial enterprises, non-profitable institutions serving residents, the general government sector and the non-resident sector in the national economic system; other loans include loans to non-residents as well as financing to enterprises in all forms except loans and bill financing.   Sources and Uses of RMB and Foreign Currency Credit Funds of Financial Institutions                                  December 2008                      Unit: RMB100 million Fund Source Balance Fund Use Balance I. Total Deposits 478444.21 I. Total Loans 320128.50   1.Deposits of Enterprises and Public Institutions 164385.79   1.Short-term Loans 128608.98   (1) Demand Deposits 101790.78 2.Long and Medium-term Loans 164195.04   (2) Time Deposits 62595.01   3.Entrusted and Trust Loans 3034.96   2. Savings Deposits 221503.47 4.Bill Financing 19314.15   (1) Demand Deposits 79776.53   5.Other Loans 4975.37   (2) Time Deposits 141726.94 II. Portfolio and Investment 80907.04   3.Entrusted and Trust Deposits 3955.43 III. Purchase of Gold and Silver 337.24   4.Other Deposits 88599.52 IV. Assets in International    Financial Institutions 940.73 II. Liabilities to International  Financial Institutions 732.59     III. Other Items -76863.29             Total 402313.51 Total 402313.51 Note: Financial institutions referred to in this table include the People's Bank of China, policy banks, state-owned commercial banks, other commercial banks, urban commercial banks, rural commercial banks, rural cooperative banks, urban credit cooperatives, rural credit cooperatives, trust and investment companies, finance companies, leasing companies, Postal Savings Bank and foreign-funded financial institutions.   Sources and Uses of RMB Credit Funds of Financial Institutions (By Sector)                                December 2008                    Unit: RMB100 million Fund Source Balance Fund Use Balance I. Total Deposits 466203.32 I. Total Loans 303467.78   1.Household Deposits 222005.63   1.Loans to Households 57060.29   (1) Demand Deposits 78336.79 (1) Consumer Loans 37212.10   (2) Time Deposits 143668.84        Short-term Consumer Loans 4137.44   2.Deposits of Non-financial Institutions 217062.46        Long and Medium-term Consumer Loans 33074.66 (1) Deposits of Enterprises and Public Institutions 195099.69   (2) Business Loans 19848.19 of which: Deposits of Enterprises 178201.62       Short-term Business Loans 14554.82           Demand Deposits 97499.04 of which: Loans to Farmers 11971.73           Time Deposits 80702.58       Long and Medium-term Business Loans 5293.37 (2)  Deposits of Government Agencies and Organizations 21962.77   2.Loans to Non-financial  Institutions and Other Sectors 246407.49 3.Fiscal Deposits 18040.04 (1) Short-term Loans and Bill Financing 125620.46 4.Other Deposits 9095.19 Short-term Loans 106341.22 II. Financial Bonds 20852.48           Bill Financing 19279.24 III. Cash in Circulation 34218.96 (2) Long and Medium-term Loans 116617.05 IV. Liabilities to International    Financial Institutions 732.59 (3) Other Loans 4169.98 V. Other Items 20836.31 II. Portfolio and Investment 71951.70     III. Purchase of Gold and Silver 337.24     IV. Purchase of Forex 166146.21     V. Assets in International   Financial Institutions 940.73         Total 542843.66 Total 542843.66 Notes: 1. Financial institutions referred to in this table include the People's Bank of China, policy banks, state-owned commercial banks, other commercial banks, urban commercial banks, rural commercial banks, rural cooperative banks, urban credit cooperatives, rural credit cooperatives, finance companies, trust and investment companies, leasing companies, Postal Savings Bank and foreign-funded financial institutions. 2. Household deposits mainly refer to household savings deposits; deposits of non-financial institutions mainly include deposits of enterprises and public institutions and deposits of government agencies and organizations; other deposits include insurance companies´ deposits in the banking sector and overseas non-resident deposits; loans to households include household consumer loans and business loans; loans to non-financial Institutions and other sectors include loans to non-financial enterprises, non-profitable institutions serving residents, the general government sector and the non-resident sector in the national economic system; other loans include loans to non-residents as well as financing to enterprises in all forms except loans and bill financing.   Sources and Uses of RMB Credit Funds of Financial Institutions                December 2008                      Unit: RMB100 million Fund Source Balance Fund Use Balance I. Total Deposits 466203.32 I. Total Loans 303467.77   1. Deposits of Enterprises 157632.21   1. Short-term Loans 125215.83   2. Fiscal Deposits 18040.04     (1) Loans to Industrial    Sector 36145.74   3. Deposits of Government Agencies and Organizations 21962.77 (2) Loans to Commercial    Sector 17742.54 4. Savings Deposits 217885.35 (3) Loans to Construction    Sector 3687.03     (1) Demand Deposits 78585.19 (4) Loans to Agricultural    Sector 17628.82     (2) Time Deposits 139300.16 (5) Loans to Township and    Village Enterprises 7454.27   5. Agricultural Deposits 10074.51 (6) Loans to Joint Venture    Enterprises 2270.83   6. Trust Deposits 3733.24 (7) Loans to Private Enterprises and Individuals 4223.82   7. Other Deposits 36875.20     (8) Other Short-term Loans 36062.78 II. Financial Bonds 20852.48   2. Long and Medium-term Loans 155034.37 III. Cash in Circulation 34218.96   3. Trust Loans 3026.43 IV. Liabilities to International    Financial Institutions 732.59   4. Other Loans 20191.14 V. Other Items 20836.30 II. Portfolio and Investment 71951.70     III. Purchase of Gold and Silver 337.24     IV. Purchase of Forex 166146.21     V. Assets in International    Financial Institutions 940.73         Total 542843.65 Total 542843.65 Note: Financial institutions referred to in this table include the People's Bank of China, policy banks, state-owned commercial banks, other commercial banks, urban commercial banks, rural commercial banks, rural cooperative banks, urban credit cooperatives, rural credit cooperatives, trust and investment companies, foreign-funded financial institutions, Postal Savings Bank, finance companies and leasing companies.   Sources and Uses of Foreign Currency Credit Funds of Financial Institutions December 2008                      Unit: USD100 million Fund Source Balance Fund Use Balance I. Total Deposits 1791.03 I. Total Loans 2437.68   1. Deposits of Enterprises 988.16   1. Short-term Loans 498.09   2. Savings Deposits 529.37   2. Long and Medium-term Loans 1340.34   3. Entrusted and Trust Deposits 32.51   3. Entrusted and Trust Loans 1.25   4. Overseas Deposits 126.79   4. On-lending of Funds Raised   Overseas 117.82   5. Other Deposits 114.20   5. Bill Financing 5.11 II. Overseas Financing 164.15   6. Other Loans 475.07 III. Purchase and Sale of Forex 2403.21 II. Portfolio and Investment 1310.28 IV. Overseas Inter-bank Transactions 215.33 III. Overseas Inter-bank Transactions 1094.65 V. Other Items 268.89             Total 4842.61 Total 4842.61   Sources and Uses of RMB Credit Funds of Other Commercial Banks December 2008                     Unit: RMB100 million Fund Source Balance Fund Use Balance I. Total Deposits 79752.16 I. Total Loans 59668.18   1. Deposits of Enterprises 43419.92   1. Short-term Loans 29157.99     (1) Demand Deposits 24535.40 (1)  Loans to Industrial     Sector 9951.30     (2) Time Deposits 18884.52 (2)  Loans to Commercial Sector 3000.87 2. Deposits of Government Agencies and Organizations 2668.57  Loans to Construction Sector 1418.44 3. Savings Deposits 18445.74  Loans to Agricultural Sector 55.31     (1) Demand Deposits 6926.29  Loans to Township and   Village Enterprises 11.43     (2) Time Deposits 11519.45 (6)  Loans to Joint Venture     Enterprises 1193.01   4. Agricultural Deposits 35.66 (7)  Loans to Private Enterprises and Individuals 1421.05   5. Other Deposits 15182.27     (8)  Other Short-term Loans 12106.58 II. Issuance of Financial  Bonds 2240.02   2. Long and Medium-term Loans 25429.09 III. Borrowing from the    Central Bank 0.00   3. Other Loans 5081.10 IV. Inter-bank Transactions 10482.90 II. Portfolio and Investment 17537.61 V. Other Items -1086.87 III. Deposits as Required  Reserves 12176.70     IV. Inter-bank Transactions 2005.72               Total 91388.21 Total 91388.21 Notes: Other banks include the Bank of Communications, China CITIC Bank, China Everbright Bank, Huaxia Bank, China Minsheng Banking Corporation, Guangdong Development Bank, Shenzhen Development Bank, China Merchants Bank, Shanghai Pudong Development Bank, Industrial Bank, Evergrowing Bank, China Zheshang Bank and China Bohai Bank. Deposits of government agencies and organizations have been taken out of other deposits to be a separate item since the third quarter of 2007.   Monetary Aggregates                       December 2008         Unit: RMB100 million   Balance Year-on-year Change (%) Money and Quasi-money (M2) 475166.60 17.82     Money (M1) 166217.13 9.06         Cash in Circulation (M0) 34218.96 12.65         Demand Deposits 131998.17 8.17     Quasi-money 308949.47 23.15         Time Deposits 60103.06 28.06         Savings Deposits 217885.35 26.29         Other Deposits 30961.06 -1.45 Note: M2 includes margins deposited with securities companies.   Exchange Rates, Gold and Forex Reserves Item 2008 October November December Exchange Rate       RMB per SDR (end-period) 10.1588 10.1701 10.5271 RMB per USD (end-period) 6.8258 6.8349 6.8346 RMB per USD (average) 6.8316 6.8286 6.8424 Gold Reserve (1 million ounces) 19.29 19.29 19.29 Forex Reserve (USD100 million) 18796.88 18847.17 19460.30

Submit Date:2009-1-13 18:23:00

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