China's total social financing has grown more than sixfold in the past decade as the dependence on bank lending as a source of funding eased, the central bank said yesterday.
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The total social financing, which includes loans, bank acceptance bills, corporate bonds and equity financing, rose from 2 trillion yuan in 2002 to nearly 13 trillion yuan in 2011, the People's Bank of China data showed. The proportion of bank loans fell from 92 percent to under 60 percent.
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"The proportion of bank lending will continue to fall along with quick development of financial innovation," a PBOC statement said.
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The stock and bond markets can now better meet the various needs of investors, and has accelerated market-oriented reforms in interest rates, an unidentified official of the PBOC's statistics and analysis department said in the statement.
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In the past decade, corporate bond issues surged from 36.7 billion yuan in 2002 to more than 1.3 trillion yuan in 2011.
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Fundraising through stocks of non-financial companies jumped from 62.8 billion yuan to a high of 578.6 billion yuan in 2010, before dropping to 437.7 billion yuan last year amid weak market conditions.
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China has been promoting the bond market to ease dependence on banks as a source of funding. Small businesses are now allowed to issue private placement bonds.
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As of the end of August, the domestic bond funds achieved average annual investment return of 4.6 percent, higher than the inflation rate and one-year deposit rate.
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But Li Daokui, a former central bank advisor, urged action to "make the stock market a more appealing source of funds for high-growth companies."
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China's total social financing has grown more than sixfold in the past decade as the dependence on bank lending as a source of funding eased, the central bank said yesterday.
