Feet down
For the first time in 10 months the Central People's Bank of China (中国人民银行) decided to lower the interest rates of loans. The yearly rate (Loan Prime Rate LPR) fell from 3.65% to 3.55% and for five-year loans from 4.3% to 4.2%.
This is another movement of the central bank after 2 another key interest rates (including medium-term loans – MLF for financial institutions at 2.65%) were besides lowered in mid-month, and offered RMB 237 billion (about PLN 135 billion) to banks through a peculiar banking debt facility.
All these measures are taken to increase stimulation, which in the second 4th gives signs of slowdown in relation to the situation recorded in the first quarter.
The activities of the Popular Central Bank do not change the forecasts of global financial institutions regarding China's GDP growth this year. For example, Nomura assumes that the increase will scope 5.1% and the Bank of America assumes that it will be up to 5.7%.
Last year China's GDP increased by 3%, mainly due to lockdowns and another restrictions resulting from the fight against the Covid-19 epidemic.
For most analysts and investors, Chinese central bank movements were not a surprise. Further measures are besides expected, specified as reducing the limit of minimum reserves in banks or encouraging the liberalisation of lending rules.
The economical situation of the country is undershadowed by the increasingly marked deflation, which imposes low (too low) levels of consumption.
Source:
The number of bank accounts is increasing
At the end of the first 4th of this year, there were a full of 214,221 billion bank accounts in the Chinese banks, including 9,573 billion accounts with various types of bank cards.
According to the latest study by the People's Bank of China on financial operations in Q1 2023, China's average resident held 6,78 bank cards.
In the first 3 months of this year, 7.112 trillion transactions were made in China with bank cards of the sum of RMB 292,90 trillion (about PLN 166,19 trillion), representing an increase of 18.75% and 10.57% respectively year-on-year.
The average value of credit card transactions was 3451.12 RMB (about PLN 1958).
Electronic payments have increased. In the first 4th of this year there were 67.58 billion of them with a full value of 83.18 trillion RMB (about 472 billion PLN), which means an increase of 6.83% and 12.44% y/y respectively. Among electronic transactions there was a decrease in online purchases (by 6.28% y/y), while the value increased by 13.84% y/y.
The number and value of mobile telephone transactions is rapidly increasing: 19.14% and 990% y/y respectively.
According to data collected by the central bank in China, the trend towards credit card payments is strengthened, net and smartphones alternatively of cash.
Source:
http://ent.people.com.cn/n1/2023/0621/c1012-40018688.html
The competitiveness of the Chinese economy is not decreasing
The global Institute for Management improvement published the latest ranking of economical competitiveness: planet Competitiveness Ranking 2023. 64 economies were assessed on the basis of over 300 indicators in 4 categories:
- economic performance,
- efficiency of government,
- business efficiency and
- infrastructure.
In the top 10 in 6th place was Taiwan (93.11 pt per 100 possible), at 7. Hong Kong (92.05 pt). Continental China ranked 21 (82.10).
Poland ranked 43 with 60.98 points.
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Internationalisation of RMB progresses
The RMB’s participation in global payments is slow and systematically increasing.
According to the Society for Worldwide Interbank Financial Telecommunications (SWIFT) in April 2023, RMB, with a participation of 2,29%, retained the 5th position (after USD, EUR, GBP and JPY), as the most active currency in cross-border transactions. In April 2021, Chinese yuan ranked sixth behind the Canadian dollar (CAD) in this ranking.
The largest bank global clearing centres RMB are Hong Kong, London, Singapore, Russia, United States. In financial marketplace settlements, RMB is the 3rd globally utilized currency (after USD and EUR). And in exchange transactions, the sixth.
Importantly, SWIFT data do not include transactions outside this system. Thus, they do not include, for example, all swap agreements, settlement agreements in their own currencies, or only in the yuan that China has signed in the last 18 months with countries and regions specified as Japan, Brazil, Argentina, Saudi Arabia, Russia, the United Kingdom, South Africa, Malaysia, the European Union, etc., etc.
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Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China
Email: [email protected]
Editorial: Leszek B.
Email: [email protected]
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