China’s new yuan loans amounted to 7.1 trillion yuan (US$1.01 trillion) in the first quarter, an increase of 1.3 trillion yuan from 5.81 trillion yuan in the same period last year.
New loans were borrowed by companies in the manufacturing, wholesale and retail and infrastructure industries, said the State Council Information Office, citing data released by the China Banking and Insurance Regulatory Commission (CBIRC).
About 1.1 trillion yuan will be used by manufacturers, while another 1.5 trillion yuan will be used on infrastructure projects, said CBIRC vice-chairman Huang Hong. About 900 billion yuan will be used by retail and wholesale firms.
These loans will effectively support the development of high-tech manufacturing, promote industrial upgrades and boost consumption and infrastructure investment, Huang said.
The CBIRC will continue to support direct financing channels including bond issues and equity sales, he said.
Micro and small firms
China’s State Council said it will give greater weight to inclusive financing in evaluating the performance of financial institutions, and lower the provision coverage ratio of small and medium-sized banks so as to boost financial services for micro and small firms.
At the State Council’s executive meeting Tuesday, Premier Li keqiang reiterated the central government’s strategy to scale up financial support for the real economy, especially the micro, small and medium-sized companies.
To encourage financial institutions to better serve micro and small businesses, the State Council decided to raise the weight of inclusive finance to no less than 10% in the integrated performance evaluation of the branches and subsidiaries of financial institutions in the banking sector, to incentivize more lending to micro and small firms.
It also called for a three-month rent exemption in the first half of this year for firms in the services sector renting state-owned properties in order to ease the rent burden on micro, small and self-employed businesses.
Since the start of the Covid-19 epidemic this year, the People’s Bank of China, the country’s central bank, has cut the required reserve ratios (RRR) three times, releasing 1.75 trillion yuan in liquidity to better support smaller businesses.
Outbound investment
China’s non-financial outbound direct investment (ODI) declined 0.6 % year on year in the first quarter of this year, said the Ministry of Commerce. Non-financial ODI in 153 countries and regions stood at 169.03 billion yuan during the period.
Chinese companies enhanced cooperation with countries participating in the Belt and Road Initiative in the first three months, adding a total of US$4.2 billion of new investment, up 11.7% from the previous year.
New investment mainly flowed into sectors including leasing and business services, wholesale and retail, manufacturing and mining, according to the ministry. The value of newly signed deals saw a year-on-year increase of 13.2% to reach 386.5 billion yuan.
Company news
Due to the sudden slump of global crude oil prices, the Bank of China announced that the trading of new positions of customers’ crude oil products, including US oil and British oil, would be suspended from Wednesday, but the closing of positions of customers would not be affected.
Huawei Technologies, the Shenzhen-based company, said its sales revenue totaled 182.2 billion yuan for the first quarter of 2020, up 1.4% year on year. The net profit margin was 7.3%.
The company said its overall business results in the first quarter were in line with expectations. It said it would focus on the construction of the new 5G infrastructure and start large-scale 5G commercialization in 2020.
Guizhou Maotai said its net profit increased 17.1% to 41.21 billion yuan for the year ended December 31, 2019, from a year ago. Operating income rose 16% to 85.43 billion yuan.
The company proposed to deliver 21.387 billion yuan, or 170.25 yuan (including tax) for every 10 shares, as cash dividends.
The story was written by Xu Jiangshan and first published at ATimesCN.com. It was translated into English by Nadeem Xu.