Central Bank of China

PRESS RELEASE Release Date: February 25, 2003




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Financial Conditions (January 2003)

Monetary Aggregates For the month of January 2003, the annual growth rates of the monetary aggregates M1A, M1B and M2, measured on a daily average basis, were 11.10%, 9.56%, and 2.90%, respectively. The annual growth rate of M1A rose as a result of the seasonal demand of the general public for currency for the upcoming Chinese lunar new year, while that of M1B declined due to the higher base of the corresponding month of the previous year caused by a bullish stock market. The higher M2 growth was mainly attributable to the increase in demand for money in preparation for the Chinese lunar new year. In addition, the M2 aggregate plus bond funds held by the general public posted an annual growth rate of 4.44% for the month.

Direct and Indirect Finance At the end of January, the annual growth rate of total loans and investments in major financial institutions, including monetary institutions and the Postal Savings System, rose from "3.30% at the end of the previous month to "2.08%, mainly because of the increase in banks' claims on government. If loans and investments extended by life insurance companies and investment and trust companies, major financial institutions' reclassifying non-accrual loans and writing-off bad loans, as well as funds raised directly from financial markets were taken into account, the total funds raised by non-financial sectors showed an annual growth rate of 3.34% for the month.

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