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Money not the answer to all problems

(Global Times)

09:00, June 26, 2013

Data from the People's Bank of China show that the country's money supply reached 97.42 trillion yuan ($15.85 trillion) by the end of last year, an amount which accounted for roughly one-fourth of the world's total money supply at the time. In the intervening months, the nation's money supply has only grown larger, swelling to 104.21 trillion yuan at the end of May.

But most of the problems faced by Chinese businesses - soft demand, higher operating costs, difficult upgrading - unfortunately can't be fixed with money alone.

Low loan efficiency is emerging as a growing threat as well, since commercial banks still predominately lend to large State-backed companies while private small- and medium-sized enterprises struggle with mounting credit costs.

China urgently needs to shake up its loan structure. Authorities can start by steering loans away from industries bogged down by overcapacity. More credit needs to be moving into advanced manufacturing, strategic emerging enterprises and the service sector.

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Email|Print|Comments(Editor:WangLili、Gao Yinan)

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