Research Report on Chinese Finance Industry

At the end of June 2009, the balance of Chinese broad monetary supply (M2) was RMB 56.9 trillion, rising by 28.5% YOY; the growth rate increased by 11.2% YOY. The balance of narrow money (M1) was RMB 19.3 trillion, rising by 24.8% YOY; the growth rate increased by 10.6% YOY. Stimulated by the loose monetary policy and active fiscal policy, Chinese economy is obviously boosted with ample liquidity and high vitality.

In 2009H1, the amount of inter-bank borrowing was RMB 7.9 trillion with a daily transaction of RMB 65 billion. The daily transaction increased by 7.8% YOY. The interest rate of the money market maintains stable with slight increase. In 2009H1, the monthly weighted average interest rates of both bond pledged repurchase and inter-bank borrowing was about 0.85%. In June 2009, the monthly weighted average interest rates of both bond pledged repurchase and inter-bank borrowing was about 0.91%, displaying a rising trend.

In 2009 Q2, influenced by Chinese economy recovery and the overall stock increase of main economies, the transaction volume in Chinese stock market increased; the stock index saw a large growth in fluctuation. At the end of June, composite indexes of Shanghai Stock Exchange and Shenzhen Stock Exchange were 2,959 and 962 respectively, rising by 1,138 (62.57%) and 409 (73.91%) compared with the end of 2008, almost the level of the end of 2008 Q2. The transaction amount in Shanghai Stock Exchange and Shenzhen Stock Exchange totaled RMB 22.18 trillion, rising by 30.9% YOY; the daily transaction amount was RMB 188 billion, rising by 33.1% YOY.

Macro data in 2009H1 indicate that active factors in Chinese national economy are rising. However, the global economy is still severe. There is great uncertainty in Chinese economy. It is predicted that Chinese government will continue the loose monetary policy in 2009H2 and the beginning of 2010. To prevent excessive rise of asset prices, Chinese central government is estimated to regulate market liquidity mostly through tools for open market operations such as issuing central bank bills, carrying out repurchase, etc.

Through this report, readers can acquire more information:

• Operation of Chinese finance industry, 2008-2009H1
• Transaction in Chinese money market, 2008-2009H1
• Transaction in Chinese bond market, 2008-2009H1
• Transaction in Chinese stock market, 2008-2009H1
• Transaction in Chinese future market, 2008-2009H1
• Main policies on Chinese finance industry, 2008-2009
• Prediction on Development of Chinese finance industry, 2009-2010

Following persons are recommended to buy this report:

• Investment banks
• Securities traders
• Commercial banks
• Investors concerning Chinese finance industry
• Research institutions concerning Chinese finance industry
• Others concerning Chinese finance industry

• Chinese Money and Credit in 2009H1
  • Upward Growth Rate of Money Supply and Ample Money Liquidity
  • Upward Deposit Growth Rate in Financial Institutions and Large Increase in Current Deposit
  • Rapid Growth of Loans in Financial Institutions
  • Continuing Decrease of Loan Rate in Financial Institutions
  • RMB Exchange Rate Maintains Stable
• Operation of Chinese Finance Market, 2009
  • Money Market
  • Maintain Active Transactions; Overnight Trade is the Main Type
  • Interest Rate Maintains Stable with Slight Increase
  • Bond Market
  • Amount of Bond Issuance Fold Increases over the Same Period of the Last Year
  • Active Bond Transaction in the Inter bank Bond Market
  • Steady Increase of the Treasury Yield Curve of the Inter bank Bond Market
  • Bond Balance
  • Stock Exchange
    • Great Increase of Stock Index in Fluctuation
    • Obvious Increase of Stock Transactions
  • Bill Market
  • Foreign Exchange Market
  • Futures Market
• Operation of Chinese Finance Industry, 2009
  • Reduction of Non-performing Loan Balance in Commercial Banks
  • Improvement on Assets Structure and Investment Income of the Insurance Industry
  • Significant Increase of Securities Traders' Profits
• Policies on Chinese Finance Industry, 2008-2009
  • Enhance the Supervision on Securities Companies
  • Adjust the Access Policy on Branches of Medium and Small Commercial Banks
  • Complete Growth Enterprise Market (GEM) Supporting Systems
  • Reform and Complete Initial Public Offering (IPO) System
  • Complete Registration and Management of Trade Credit
• Prediction on Chinese Finance Industry, 2009-2010
  • Factors Affecting Chinese Finance Industry
  • Prevention and Control of Credit Risks
  • Monetary Policies Prediction
  • Overall Market Prediction
• Selected Charts
  • Chart Balances of Chinese M0, M1 and M2, 2008-2009H1
  • Chart RMB Deposits in Chinese Finance Institutions, 2008-2009H1
  • Chart RMB Loans in Chinese Finance Institutions, 2008-2009H1
  • Chart Growth of Chinese Foreign Exchange Reserves, 2008-2009H1
  • Chart Trend of Weighted Average Interest Rate of Chinese Inter bank Borrowing and Repurchase, 2007 2009H1
  • Chart Monthly Turnover Rates of Various Bonds in China, 2009H1
  • Chart Transaction Amount in Inter bank Bond Market, 2008-2009H1
  • Chart Scales of Chinese Stock Market, 2009H1
  • Chart Exchange Rates in Chinese Foreign Exchange Market, 2008-2009H1
  • Chart Transaction Amount in Shanghai Futures Exchange, 2009H1
  • Chart Transaction Amount in Zhengzhou Futures Exchange, 2009H1
  • Chart Transaction Amount in Dalian Futures Exchange, 2009H1
  • Chart Non-performing Loans in Chinese Finance Institutions, 2009H1
  • Chart Operation of Chinese Insurance Industry, 2009H1