Analyze China's monetary policy.

Some understandings of China's current monetary policy

After the soft landing of the economy, the contradiction of insufficient demand began to appear in China. In this context, although the central bank adheres to a prudent monetary policy, the actual monetary policy of the central bank has gradually loosened. 1 May 1996 to 1 June 1999, the People's Bank of China lowered the interest rate seven times, and the interest rate of1year deposit dropped from 10.98% in April 1996 to 2.25% in 1999, and at the same time it was/kloc. At the same time, the State Council decided to resume the personal income tax on savings deposit interest from 1999 1 1, which is equivalent to the eighth interest rate cut for depositors. According to the interest tax rate of 20%, the interest rate obtained by residents from 1 year deposits is only 1.

First, how far can our interest rate policy go?

The eighth real interest rate cut occurred in February 2002: 1 year deposit rate dropped from 2.25% to 1.98%, 1 year loan rate dropped from 5.85% to 5.3l%%, and reserve deposit rate dropped from 2.07% to1.88%. The 20-day, 3-month, 6-month and 1 year refinancing rates were lowered from 3.24% to 2.7%, from 3.5l%% to 2.97%, from 3.69% to 3. 15%, and from 3.78% to 3.24% respectively. Therefore, the monetary policy since May 1996 can be regarded as the interest rate reduction cycle.

The eighth interest rate cut was made against the background of the continuous slowdown of world economic growth. According to guanidine? Mechanical capsule marks? Shun said that Emperor Qin fainted at night? Are you obsessed with the group? What is salt? Fan > capsule? Kang nao qu Lu? Hey? ⒅ с? Push the hat to block the wood? Kill Jing Xi? ⒄ ? m？ Promise? Hey? Stone tanning? Blade? Hey? Leftovers? Ditch? Write? Hey? What a good stew. ? Resentment? Todd. Are you lazy? Baked Hector? Hey, alpha? /P & gt；

However, the role of the eighth interest rate cut policy of the central bank in diverting savings and stimulating investment is still limited. After the central bank lowered the deposit and loan interest rates and their spreads from February 2, 2002, the year-on-year growth rate of deposits in financial institutions dropped to only 14.2% in March, while the year-on-year growth rate of loans rose to 13.5%, and the year-on-year growth rate difference suddenly dropped from 4.4% in February to 0.7% in March. However, since then, the year-on-year growth difference between deposits and loans of financial institutions has rebounded rapidly, fluctuating around 4%, rather than maintaining it at a level far lower than that in February 2002. This fully shows that the eighth interest rate cut makes it difficult for commercial banks to realize the transformation of funds from savings to investment.

In fact, similar problems have appeared in the interest rate reduction since May of1996, and the macroeconomic response to the interest rate decline is slow and powerless. It can be asserted that if China continues to cut interest rates above the current level, there will be a liquidity trap sooner or later. Therefore, the room for further reduction of deposit and loan interest rates is very limited, and the interest rate policy has basically come to an end.

As far as the current interest rate level is concerned, we have to say that the central bank's monetary policy has been very loose. Although China's monetary authorities have always adhered to a prudent monetary policy, in fact, the central bank has been implementing an expansionary monetary policy since it cut interest rates eight times. However, the problem of difficult loans for SMEs has never been effectively solved. The number of SMEs in China accounts for more than 90% of all enterprises, 60% of industrial output value, 40% of actual profits and taxes, 75% of employed people and 90% of new employment opportunities, which has become an important growth point of China's economic development. In addition, since September 20001year, China has experienced intermittent deflation, especially since March 2002, the price level has been in a state of decline. Since these phenomena are not caused by high interest rates, is it caused by the insufficient circulation of money by the central bank?

Second, investigate the appropriateness of the central bank's money supply.

Whether the money supply is endogenous or exogenous has always been debated in theoretical circles. The so-called externality of money supply means that all countries in the contemporary world have established a central bank system with exclusive rights to issue money. The central bank is not only the issuer of credit money, but also the regulator of money supply. At the same time, the change of money supply is not completely controlled by the central bank's monetary policy, but also influenced by the objective economic process, that is, by the monetary receipt and payment behavior of other economic entities in the economic society, so the money supply is also an endogenous variable.

First of all, as far as money supply is concerned, there seems to be no problem with the money supply of the central bank. According to the statistics in August 2002, the M2 broad money balance was 17.3 trillion yuan, up 15.5% year-on-year, which was 1. 1 percentage point higher than that at the end of last year, the highest growth rate since August 1965, and the M2 narrow money balance was/kloc-. The cash M0 balance in circulation was 6.5438+0.57 million yuan, up 9.3% year-on-year, and the growth rate was 2.2 percentage points higher than that at the end of last year. Obviously, the broad money growth is stable in the stable range of 13- 15%, which shows that China's money supply index is exogenous.

Since the money supply is sufficient and money is sent to enterprises through financial intermediaries, why are the funds of small and medium-sized enterprises generally tight? Are large and medium-sized enterprises holding too much money? In fact, it is difficult for the central bank to maintain a moderate and steady growth in M2 currency issuance. However, due to the rising foreign exchange reserves in China, the expected goal of money supply can be achieved by increasing foreign exchange holdings with the help of the central bank's sterilization operation to maintain the exchange rate level. On this basis, some scholars believe that the reason for the shortage of funds for SMEs is that although China's money supply has increased year after year, the foreign exchange reserve assets used for overseas appreciation of the central bank's money supply have continued to grow, the part of domestic credit used to support government expenditures has increased rapidly, and some bank loans have been offset by non-performing assets. Observing the central bank's money supply from 1998 to 200 1, it is found that the total assets used abroad have increased by 93.4%, while the assets used at home have only increased by 59.6%. In absolute terms, there are 2,644.2 billion yuan in the broad money supply of 200158302 million yuan.

However, the above analysis that the shortage of funds for small and medium-sized enterprises is attributed to the rapid increase of foreign exchange holdings of the Bank of China, so the total money supply is actually less used for domestic credit is problematic. If you look at the monetary base from the balance sheet of the central bank, it should be:

Base currency =? Foreign net assets+creditor's rights to the government+creditor's rights to commercial banks+creditor's rights to other financial institutions+other bills-government deposits+other net items.

Money supply = base money × money multiplier

The money supply depends on both the quantity of the base money and the money multiplier, which is the product of the two. Foreign net assets are a part of the basic currency, which are converted into RMB through the write-off behavior of the central bank and into money supply through the loan behavior of the bank. It is no different from other forms of projects, such as securities such as creditor's rights to the government, creditor's rights to commercial banks and creditor's rights to other financial institutions, but other projects do not need to be converted into local currency by the central bank. Whether an enterprise is short of funds can not be considered in isolation from the base currency and its composition, but only from the perspective of the total money supply and its composition. Therefore, it is biased to draw the conclusion that the central bank's excessive foreign exchange accounts for the shortage of funds in China's small and medium-sized enterprises.

Based on the above logic, the investigation on the loan difficulty of small and medium-sized enterprises is carried out with the help of the balance sheet of commercial banks. On the premise that the monetary authorities do not allow commercial banks' funds to enter the stock market, as a rational commercial bank, in the absence of risks, it will first choose to provide loans to enterprises, then it will choose to buy government bonds, and finally it will choose to increase its reserves in the central bank, because the return on investment of commercial banks in these three items will decrease in turn. The problem is that when banks don't fully understand the credit of enterprises, the moral hazard of enterprises is great, and their expected rate of return on loans to enterprises will be quite low, which may be lower than the interest rate of government bonds or even lower than the interest rate of central bank reserves. In this way, commercial banks will use the remaining funds for national debt and excess reserves. Once it becomes the reserve of the central bank, this part of funds will lose the function of creating deposits. At the same time, compared with commercial bank loans, bank funds are used to buy government bonds from the central bank, which also increases the tightening effect on the economy. Therefore, the shortage of funds for SMEs is because banks are reluctant to lend, and commercial banks use a large part of their funds for national debt or central bank reserves.

In fact, if the degree of commercial banks' reluctance to lend is alleviated, China's money supply will be further improved under the condition that the monetary base remains unchanged and the monetary multiplier is expanded. Due to the poor transmission mechanism of monetary policy, even if the central bank can accurately control the monetary base, it is impossible to fully control the monetary multiplier. In this sense, the whole process of central bank's money supply should be regarded as endogenous.

Three, flexible short-term monetary policy and long-term financial structure reform

Flexible and diversified short-term monetary policy

1. Reduce the reserve interest rate.

At present, to strengthen financial support for the economy, it is not enough to rely solely on the central bank to cut interest rates, and a flexible monetary policy must be implemented. In China, the development of small and medium-sized enterprises is the key factor of economic growth. However, a survey of 688 enterprises in some cities/KLOC-0 by the State Economic and Trade Commission shows that 88% of enterprises think that the supply of credit funds is "tight" or "very tight". It seems that solving the shortage of funds for small and medium-sized enterprises should become an important aspect of current monetary policy formulation.

In August 2002, the Central Bank's Guiding Opinions on Further Strengthening Credit Support for Small and Medium-sized Enterprises with Market, Benefit and Credit required commercial banks to increase their support for the development of small and medium-sized enterprises on the premise of adhering to the credit principle, and actively provide credit support for small and medium-sized enterprises with market, benefit and credit to meet their reasonable liquidity needs as much as possible. In fact, this guidance can only be a measure of rights and interests. Commercial banks' reluctance to lend is based on the consideration of maximizing their own profits and the result of comparing the risks and benefits of providing loans to enterprises. If we do not act according to economic laws and force commercial banks to lend to small and medium-sized enterprises that actually do not meet the loan conditions, it is hard to say how many bad debts this guidance has brought to the four major state-owned commercial banks once there are risks in the future and the loans are difficult to recover.

Therefore, the best choice for the central bank should not be through administrative orders, but through market means to guide commercial banks to lend to SMEs. As the growth rate difference between deposits and loans hovered around 4% a few months after the eighth interest rate cut in February 2002, commercial banks had a lot of idle funds and could not lend. Their only choice is to increase the central bank's excess reserves and national debt.

The deposit reserve policy is one of the three traditional monetary policy tools. Generally speaking, when the economy is overheated, the tendency of financial institutions to lend increases, and the loan risk caused by the inability to repay funds in the future also rises, the central bank will raise the reserve interest rate, and even raise the reserve ratio to cool the economy; On the contrary, the central bank will consider lowering the reserve interest rate or even the reserve ratio to stimulate banks' lending behavior. At present, the statutory reserve ratio of China's central bank is 6%, but in addition, commercial banks still have an excess reserve of 4-6%, which means that 10% to 12% of the deposits absorbed by commercial banks are deposited in the reserve account of the central bank for interest bearing, and are not used to provide loans to enterprises. In February 2002, the central bank lowered the deposit reserve interest rate from/kloc-0 to 1.89% from 2.07% in June 2009, but the excess reserve ratio of commercial banks is still above 4%. Therefore, it is promising for the central bank to reduce the reserve interest rate. In fact, in developed countries such as the United States, the central bank does not pay interest on the reserve, so banks may also refer to other countries when lowering the reserve interest rate. (see table)

2. Gradually reduce the repurchase of government bonds.

In addition to the excess reserves, commercial banks have spent a lot of money on national debt due to the pressure of bank operation and the single variety of investment in the financial market. By the end of May 2002, financial institutions held 936.7 billion yuan of national debt? Excluding the 270 billion yuan of special government bonds issued by the government to commercial banks, an increase of 654.38+00.22 billion yuan or 6543.8+02.2% over the end of last year; It accounted for 56.7% of the total national debt market, up 3.3 percentage points from the end of last year; It accounted for 5.5% of its total capital utilization rate, up 0.3 percentage points from the end of last year. Among them, the national debt held by commercial banks was 829 1 billion yuan, an increase of 93.6 billion yuan or12.7% over the end of last year; It accounted for 50.2% of the total national debt market, up 3. 1 percentage point from the end of last year; It accounted for 6.3% of its total assets, up 0.4 percentage points from the end of last year. This shows that at present, financial institutions, especially commercial banks, have become the most important investors in the national debt market, and at the same time hold a large number of national debt and the proportion is expanding.

At present, national debt has been widely used by central banks all over the world as an operating tool for open market business. By selling national debt, the expansion or contraction of credit can be realized, so as to adjust the money supply. Open market operations are mainly carried out through bond repurchase. The so-called "repurchase" refers to one party to the transaction? The seller is selling bonds to the other party? At the same time with the buyer, the buyer and the seller agree to buy back the same kind of bonds with the same amount from the seller on a specified date in the future at the price agreed by both parties. Among them, the so-called positive repurchase refers to the repurchase of primary dealers as bond sellers, while reverse repurchase refers to the repurchase of primary dealers as bond buyers. Because repurchase means reducing the stock of bond assets of the central bank, repurchase means that the central bank is tightening the currency; On the contrary, the central bank can also expand the currency through reverse repurchase.

At present, due to the excessive growth of currency due to the increase of foreign exchange reserves caused by China's foreign trade surplus and the interest rate risk of commercial banks holding government bonds, the central bank conducted 16 repurchase times from June 25th to June 5th, 2002, and adjusted the low bond yield to a reasonable position. There is no need to guide its increase at present. From the macro perspective of China's economy, there has been deflation in China since March, but there is no inflationary pressure. Therefore, there is room to increase the money supply to solve the shortage of funds for small and medium-sized enterprises, which is actually a kind of cooperation that monetary policy should gradually weaken in response to fiscal policy. Based on this logic, even if the central bank cannot carry out reverse repurchase, the positive repurchase behavior should gradually fade out. At the same time, it also helps commercial banks to adjust their asset structure, reduce their holdings of national debt and encourage enterprises to lend.

Once the reserve interest rate continues to be lowered, the income from purchasing government bonds will be greatly reduced, and commercial banks will increase their loans to small and medium-sized enterprises out of the choice of maximizing profits. Obviously, compared with the central bank forcing commercial banks to provide loans to enterprises through administrative orders, the implementation of the above monetary policy brings less operational risks to commercial banks. However, this countermeasure is still only a short-term strategy. Because once a commercial bank lends its funds to all customers with higher expected loan returns, and there are no more high-quality customers, its choice may be to use the funds for inventory and never lend them to customers with negative expected loan returns. Therefore, in the long run, we need to adjust the existing financial structure.

Long-term financial structure reform

1. Establish a large number of small and medium-sized financial institutions and increase capital and shares.

Limited by capital constraints, small and medium-sized financial institutions cannot provide loans to large enterprises. Before granting each loan, they may make an in-depth and detailed inspection of their loan targets-SMEs. For large commercial banks, they can provide loans for both large enterprises and small and medium-sized enterprises. However, compared with large enterprises, the moral hazard of small and medium-sized enterprises is more difficult to investigate. Even if small and medium-sized enterprises actually have low-risk projects with high return on investment, in the view of large commercial banks, they expect lower return on real loans? Because they give relatively great weight to the possibility of enterprises not repaying loans. Secondly, the transaction cost of each loan of commercial banks is not much different, while the loan scale of small and medium-sized enterprises is much smaller than that of large enterprises, so the transaction cost of unit loans is very high. For example, if a large enterprise borrows 1 100 million yuan at a time and a small enterprise borrows 1 2.5 million yuan at a time, then the transaction cost of banks lending 1 100 million yuan to small enterprises is about 40 times that of large enterprises.

Therefore, the long-term solution to the problem of small and medium-sized enterprises' loan difficulty is to establish more small and medium-sized financial institutions. One way to establish small and medium-sized financial institutions is to speed up the establishment of private financial institutions, and the other way is to split large state-owned commercial banks with low efficiency. The purpose of the split is twofold: one is to increase the number of small and medium-sized financial institutions, and the other is to solve the non-performing assets of commercial banks. As far as the existing scale of the four major state-owned commercial banks is concerned, the overall listing is very difficult. Splitting them into smaller regional banks will help to fundamentally change their bank governance structure through the change of ownership structure. The third idea is to increase capital and share of small and medium-sized banks. 2001165438+1On October 28th, the International Finance Corporation, a subsidiary of the World Bank, signed an agreement with Nanjing Commercial Bank to acquire 1.5% equity of the bank for US$ 27 million. In 2002, Hangzhou Commercial Bank "can complete the plan of introducing private capital within this year, when the proportion of private capital will exceed 50%", while the financial stocks will drop to about 30%. These are of great practical significance for expanding the capital of small and medium-sized banks and alleviating their loan difficulties. Moreover, compared with the central bank's increase in refinancing of small and medium-sized enterprises, the risk will be lower.

2. Realize the flattening of the management system of commercial banks.

China's four major state-owned commercial banks implement a five-level management system, the management chain is too long, the information transmission is not smooth, and the grass-roots banks are only savings banks, but have no loan function, so the "nerve endings" that can provide loans to SMEs have actually been cut off. Therefore, only by working hard on the organizational structure of banks and flattening the organizational structure can the problem of SME loans be fundamentally solved. For example, the head office and tier-one branches should undertake more management functions and play a leading role in improving management level; Turn the secondary branch into a basic accounting unit, assume the management function of the income and expenditure bank, and develop the branch into a regional business and product distribution center.

3. Reduce the additional cost of enterprise financing and establish a complete enterprise credit rating system.

Compared with developed countries such as the United States, China's underdeveloped financial system and the small number of small and medium-sized financial institutions are important reasons for the difficulty in lending to SMEs in China. On the other hand, the loan guarantee system is not perfect and the financing cost of small and medium-sized enterprises is too high. Corporate loans not only need to pay bank interest rates, but also pay asset appraisal fees, mortgage registration fees, notarization fees, and guarantee fees and consulting fees charged by guarantee institutions. For example, 1 loan100-1000,000 yuan, enterprises generally have to pay an asset appraisal fee of 2.5-6 ‰, a mortgage registration fee of 0. 1- 1 ‰ and a notary fee of 0.2-0.3%. In addition, loan guarantee companies generally charge 0.4-3.5% of the loan amount of 65438+ as the guarantee fee, plus 0.3% of the consulting fee, which makes enterprises overwhelmed.

At present, although there are SME loan guarantee institutions in China, the scope of guarantee is narrow, not only in the number of guaranteed enterprises, but also in the types of guarantee, which are limited to personal consumption credit, enterprise discount and bank acceptance bills. Private enterprises' farmland asset investment loan guarantee is minimal, and the working capital loan guarantee is less than 65,438+00%, which has not yet achieved market-oriented operation. To reduce the extra financing burden of small and medium-sized enterprises, the most important thing is to establish more market-oriented credit guarantee companies, and reduce the charging prices of guarantee companies through mutual competition, thus reducing the financing costs of enterprises. Although there have been examples of government providing credit guarantee for small and medium-sized enterprises abroad, it is still not the best strategy to invest government bonds in guarantee companies, because it will lead to "problem guarantee" sooner or later, which is not only not conducive to guarantee companies to reduce operating costs and improve work efficiency in competition, but also may lead to the second "debt-to-equity swap" between banks and enterprises in disguise.

In addition, the credit rating system of SMEs in China needs to be improved. Because SMEs didn't have a perfect credit rating in the past, banks stopped in the face of the loan risks of SMEs. By the same token, for consumers, because there was no corresponding credit system in China in the past, both banks and consumers wasted a lot of manpower and material resources in the process of lending to determine the personal credit degree, which increased the financing cost of lenders.

4. Improve the capital market and money market, expand the floating range of interest rates, and realize the marketization of interest rates.

In order to prevent financial risks, the central bank banned bank funds from entering the stock market. First of all, we must see that this practice of the central bank is worthy of recognition. Despite the strict supervision of China Securities Regulatory Commission, there are still many problems in China stock market. The stock basically doesn't pay dividends, which makes the long-term investment in China stock market have low value and only speculative value. However, with the healthy development of China stock market, allowing bank funds to enter the stock market should be put on the agenda again by the People's Bank of China. In fact, due to the single variety of financial products, inactive capital market, single assets of commercial banks and narrow investment channels, it is not conducive to commercial banks to change their operating performance and reduce the proportion of non-performing assets.

Different from the capital market, the money market mainly provides short-term financing places for capital demanders. It is mainly composed of commercial paper market, interbank lending market, treasury bond market and short-term foreign exchange market. Among them, the commercial paper market has more practical significance for SME financing, because the paper financing method adapts to the characteristics of SMEs, such as strong liquidity, small amount, short cycle and high frequency, and reduces the financing cost of SMEs. At present, commercial banks are more inclined to lend to large customers, and bill business has the natural advantage of facilitating the financing of small and medium-sized enterprises. Therefore, the extensive development of bill business has offset the credit inhibition to small and medium-sized enterprises to a considerable extent. At present, in order to increase financial support for the economy, the central bank has increased the intensity of refinancing and guided commercial banks to increase credit supply to small and medium-sized enterprises. On the other hand, due to the consideration of financial security, the restrictions on commercial banks' bill business have been strengthened, which has weakened the enthusiasm of banks for lending to small and medium-sized enterprises, resulting in a sharp decline in bill business. Therefore, the urgent task is not to strengthen the supervision of the bill business of financial institutions, but to reform the regulations on the proportion control of the issuance of bank acceptance bills and change it into a system that controls the amount of bill issuance according to a certain proportion of the deposit difference. At the same time, it is necessary to change the dilemma that small and medium-sized financial institutions and state-owned commercial banks are discriminated against in bill business access, and ultimately promote the financing and economic development of small and medium-sized enterprises.

Secondly, the goal of interest rate marketization in China is far from being realized. At present, the only market-oriented interest rate in China is the interbank lending market. According to statistics, as of July 2002, the number of members of the National Interbank Lending Center has grown to 660, and the four major state-owned banks, 10 joint-stock commercial banks and most city commercial banks are members of the center, which has played an important role in the adjustment of positions among banks. It should be noted that the entry qualification of dismantling market in the same industry should be further lowered, and more small and medium-sized financial institutions should be allowed to join, especially in some relatively developed provinces and regions in China, and finally financial support for small and medium-sized enterprises should be increased.

At the same time, we should further expand the floating range of loan interest rates and finally realize the marketization of interest rates. In this way, commercial banks, especially small and medium-sized banks, can provide more loans to enterprises, especially small and medium-sized enterprises, on the basis of weighing their own risks and benefits, thus alleviating the capital bottleneck in the process of economic development.

For the simplest example, if small and medium-sized enterprises with high-yield projects are unable to obtain bank loans and are willing to pay the interest rate of 10% to banks, and the small and medium-sized banks have the right to raise the loan interest rate from 5.3 1% stipulated by the central bank to 10%, then small and medium-sized banks may obtain more funds from large banks with loose funds in the interbank lending market and lend them to more enterprises; At the same time, large banks have also solved the problem of idle funds because they don't have good investment projects, which eventually led to a win-win result for small and medium-sized banks and large commercial banks.

Small banks may not be without big problems.

Will the problem of banks' reluctance to lend be solved by splitting large banks into small banks or setting up a large number of small and medium-sized banks, and will the transmission mechanism of China's monetary policy be smooth? The answer is no, of course. At present, China's commercial banking system is mainly composed of four wholly state-owned commercial banks, 12 joint-stock banks, urban commercial banks, urban credit cooperatives, rural commercial banks and rural credit cooperatives. According to general logic, the four major state-owned commercial banks are prone to be reluctant to lend, while other banks should be relatively reluctant to lend. However, this is not the case.

With the help of the above figure, we can get the overall ranking of loan-to-deposit ratio of commercial banks in China. What are the highest banks in loan-to-deposit ratio? Joint-stock commercial banks 1 1, followed by wholly state-owned commercial banks and rural credit cooperatives, urban credit cooperatives and urban commercial banks are the least, and the last one is a rural commercial bank, which obviously has the problem of reluctance to lend.

According to common sense, urban credit cooperatives, urban commercial banks and rural commercial banks are all small commercial financial institutions, and they should have a stronger affinity with small and medium-sized enterprises, so it is easy to provide loans for them. The contradiction of sparing loans should not be serious, but the fact is just the opposite. At the same time, although the loan-to-deposit ratio of wholly state-owned commercial banks showed a downward trend month by month from 2002 1 month to July, the phenomenon of reluctance to lend was not the most serious among all commercial banks.

Why do commercial banks have today's loan-to-deposit ratio pattern with profit maximization as the core? This can be mainly explained by the historical evolution, layout, business types and policy orientation of commercial banks. If we compare city commercial banks with joint-stock commercial banks, we can find that most of them are transformed from credit cooperatives, with some or even huge bad debts and historical burdens such as personnel placement, while joint-stock commercial banks have a clear starting point at the beginning of their establishment, thus increasing their own expansion space. Secondly, the business development of city commercial banks is restricted by regions, so commercial banks in economically developed areas are often greater than those in underdeveloped areas, and their benefits are also better than those in underdeveloped areas; At the same time, joint-stock commercial banks are free to choose branches. Such as China Merchants Bank and CITIC Industrial Bank, try to locate their branches in advantageous areas with developed economy and smooth information. Therefore, on the whole, joint-stock commercial banks are more likely to apply their funds to the corresponding advantageous projects. Thirdly, city commercial banks are relatively inferior in business types and variety innovation. Joint-stock commercial banks attract more customers by providing "personal pledged loans", "personal entrusted loans" and "remote pledged loans".

Through similar analysis, it is not difficult to find out why rural commercial banks and urban credit cooperatives also have the problem of reluctant loans. However, congenital deficiency does not necessarily mean that the problem of reluctant loans cannot be solved, because there are no similar problems in rural credit cooperatives at almost the same starting point, which is probably caused by deep-seated institutional and structural problems. Therefore, the central bank must pay attention to the problem that small and medium-sized financial institutions in China are seriously reluctant to lend, and in the short term, because China's 12 joint-stock banks and rural credit cooperatives have played a high efficiency in lending to small and medium-sized enterprises, the central bank should provide them with financial support through refinancing.

Finally, wholly state-owned commercial banks are facing operational risks and non-performing loans, and generally strengthen unified corporate management and loan collection rights, resulting in a significant decline in loan-to-deposit ratio of a considerable number of county branches. However, the success or failure of the four major state-owned commercial banks largely determines the success or failure of China's financial reform, so both the financial regulatory authorities and all sectors of society have paid enough attention to it. At present, the national credit policy encourages them to borrow money, which makes them not go far in the problem of sparing loans. However, since 2002, the loan-to-deposit ratio of China's wholly state-owned commercial banks has been declining. Once the national policy support is lost, the problem of loan reluctance will become more serious and must be paid enough attention to.