Salt Season

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Salt Season

XINHUA

A worker harvests dried salt at Yanchi Village of Gaotai County， northwest China’s Gansu Province， on September 6. Gaotai， with its long history of producing salt， is an important chemical raw material base in the province.

PMI Data

Activity in China’s manufacturing sector expanded in August due to a recovery in market demand and a rebound in production， official data showed on September 1.

The purchasing managers’ index（PMI） came in at 50.4 in August，rising from 49.9 in July， according to the National Bureau of Statistics（NBS） and the China Federation of Logistics and Purchasing.

A reading above 50 indicates expansion， while a reading below 50 reflects contraction.

NBS statistician Zhao Qinghe said both production and demand picked up in August.

Company confidence generally improved in August， especially in hitech manufacturing and consumer goods. Business expectation indices for the two sectors both rose to over 60 percent， underlining optimism for future growth.

However， Zhao noted that China still faces mounting export pressures as global economic growth remains tepid.

NBS data released on September 1 also showed that activity in non-manufacturing industries continued to expand in August， but at a slightly slower pace than in the previous month.

The non-manufacturing PMI stood at 53.5 in August， down from 53.9 in July but above the 50 mark that separates growth from contraction， said the NBS.

China is counting on growth in services to offset weakness in manufacturing and exports.

SDR Bonds

The World Bank on August 31 issued landmark bonds denominated in special drawing rights （SDR） in China’s interbank market.

The three-year bonds worth 500 million SDR （$700 million） were billed as Mulan bonds. The Chinese currency， the yuan， will be used as the settlement currency.

It is the first issuance of SDR bonds since 1981.

“We are honored to support China in its efforts to internationalize its capital and currency markets through the launching of an SDR bond issue and the new Mulan market，” said Arunma Oteh， World Bank Vice President and Treasurer.

A much bigger wave of bonds can be expected as the World Bank plans to sell as much as 2 billion SDR bonds in China.

The SDR is the reserve currency administered by the International Monetary Fund （IMF）， the price of which is determined by a basket of currencies including the U.S. dollar，the euro and the Japanese yen.

The yuan is scheduled to be included in the basket in October，which will be a milestone in the internationalization of the currency.

The People’s Bank of China（PBOC）， the central bank， said the bonds were heavily oversubscribed，with about 50 domestic and overseas financial institutions interested.

Interbank debts denominated in SDR will enrich China’s bond market and help promote the global use of the currency， the PBOC said， adding that it will continue to improve SDR bond trading and propel the opening up of China’s market.

Green Credit

The Chinese banking sector has reported credit growth in the green sector and a lower bad loan rate amid surging green financing demand， according to the country’s banking regulator.

The outstanding green credit of 21 major banks stood at 7.26 trillion yuan（$1.09 trillion） at the end of June， accounting for about 9 percent of total loans， according to the China Banking Regulatory Commission （CBRC）.

Outstanding loans for new energy， new-energy vehicles， and other strategic emerging sectors reached 1.69 trillion yuan （$253.4 billion），while those for energy conservation and environment protection projects and services totaled 5.57 trillion yuan（$835.1 billion）， which might save 187 million tons of standard coal，according to Ye Yanfei， a researcher with CBRC.

All the outstanding green credit was offered according to commercial standards without any government subsidies， Ye added.

Meanwhile， the bad loan rate for green credit stood at 0.41 percent at the end of June， about 1.35 percent-