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Global Health Econ Sustain An analysis of national economic resilience

As the quarterly GDP growth rate returned to positive,
the central bank slightly tightened monetary policy to
prevent inflation (Figures 2 and 12). In January 2021, the
year-on-year growth rate of M1 was found to increase
significantly to 14.7%, because most enterprises in
China habitually reserve a large sum of cash or demand
deposits 1 month before the spring festival. At the same
time, the year-on-year growth rate of M0 plummeted to
−3.9%. The central bank tightened monetary policy and
the government did not advocate going home for the
Spring Festival celebration to prevent and control the
epidemic, thus reducing the liquidity of money. From
April to December 2021, the year-on-year growth rate Figure 12. Money supply in M0, M1, and M2
of M2 tended to be stable at 8.5% under the adjustment
of monetary policy, while that of M1 decreased to about
3% from March to December 2021, returning to the state
before the epidemic. The year-on-year growth rate of
M0 fluctuated to 7.7% in 2021, reflecting that the money
supply has generally returned to the normal level.
The 1-day interbank offered rate (IBOR) experienced a
decline first and then returned to stability after the outbreak
of the epidemic (Figure 13). The central bank adopted a
loose monetary policy and lowered the IBOR to speed up Figure 13. Weighted average value of interbank offered rate: 1-day (value
of the current month)
the capital flow and deal with the bank cashing problems
that may be caused by the epidemic. The IBOR decreased
from 2.09% in December 2019 to 1.11% in April 2020.
After August 2020, the IBOR was raised to 2.04% because
the epidemic was under control, but the overall trend was
lower than that before the epidemic. In December 2020,
in response to the outbreak of the epidemic in Northeast
China, the IBOR reduced to 1.30% again. Then, it fluctuated
around 2% from March to November 2021. It is evident
that the IBOR assumed stability when the epidemic control
was achieved.
5.3.2. Financial institutions
Figure 14. The profits of commercial banks. Notes: (1) The profits of
The impact of the epidemic on the profitability varies from large state-owned commercial banks encompass earnings from five
bank to bank. The epidemic’s impact on the profitability institutions: Bank of China, Industrial and Commercial Bank of China,
of large state-owned commercial banks is negligible. As Agricultural Bank of China, China Construction Bank, and Bank
shown in Figure 14, the profits of this type of commercial of Communication. (2) The profits of joint-stock commercial banks
banks fluctuated regularly and periodically throughout encompass earnings from eight banks: China Merchants Bank, Shanghai
Pudong Development Bank, China CITIC Bank, China Everbright Bank,
the year, that is, starting with the lowest profit in the first Hua Xia Bank, China Minsheng Bank, China Industrial Bank, and Ping
quarter, and maintaining profit growth in the subsequent An Bank.
quarters. In the third and fourth quarters of 2019, the
profits of joint-stock commercial banks were 4100 and During the epidemic, different bank types encountered
4913 billion Yuan, respectively, but they decreased to 3770 varied risks (Figure 15). The NPL ratios of state-owned,
and 4303 billion Yuan, respectively, in the third and fourth joint-stock, and foreign banks remained stable, whereas
quarters of 2020. The profitability of these large state- those of city and rural commercial banks experienced slight
owned commercial banks is less affected by the epidemic, increases. Specifically, the NPL ratio for rural commercial
because they have a better reputation and larger operation banks rose from 3.90% in Q4 2019 to 4.21% in Q2 2020,
scale than the joint-stock commercial banks. and for city commercial banks, it increased from 2.32% in

Volume 2 Issue 2 (2024) 11 https://doi.org/10.36922/ghes.1842