Entity economy`s lack of demand makes “house slaves” popular again on the contrary. The central bank published China`s July financial data in mid-August， which obtained great concerns across the board. On one hand， the scissors differentials between M1 and M2 has extended to 15.2%， hitting a new historical high， and poor performance of corporate loans has shown firms` investment willingness have declined and the phenomenon of capital switching from entity economy to fictitious economy is still serious； on the other hand， the en- tire July RMB loans only increased by 463.6 billion yuan with a Y-o-Y growth decline of 1.01 trillion yuan， but residents` loans increased by 457.5 billion yuan and became the strong part of newly-added loans.


　　Mr Zeng， Dean from Bank Research Office of Financial Institute of Chinese Academy of Social Sciences， said， “Residents` loans include consumption loans and personal business loans. The main proportion of consumption loans is housing loans.”
　　Data released by the central bank also shows， the main contributor of newly-added loans is residents` longterm loans with a new increase of 477.3 billion yuan， accounting for 102% of newly-added loans， hitting a new historical high. According to Mr Wang` interpretation， the banking analyst from Guotai Jun`an Securities， residents` long-term loans included housing mortgage loans， commercial housing loans， automobile loans， etc.， and housing mortgage loans made the main contribution. He said， “No matter the real estate market is good or bad， there remains the rigid demand for each month. So， long-term personal loans have kept relatively stable.”
　　Declines of corporate loans are rarely seen， but it did happen in July. The freefall of July newly-added loans was related to the continuous slowdown of corporations` demand for effective credit loans. The central bank data shows， long and medium term loans saw new addition of 151.4 billion yuan in July with a M-o-M growth fall of 259.1 billion yuan， short term loans saws declines of 201.1 billion yuan with a M-o-M growth fall of 399.2 billion yuan.


　　The fact that credit loans didn`t perform well demonstrates that corporations had low willingness to invest. Mr Zong， Deputy Chief of International Financial Research Institute from Bank of China， commented that，“The enlargement of price scissors between M1 and M2 is related to capital`s failure to go to fixed destinations.” 　　According to Mr Sheng`s point of view， the situation of “deviating entity economy and switching to fictitious economy” has formed liquidity trap. He had previously expressed that， large quantity of newly-issued money failed to spur the economy rapidly， which means， enterprises didn`t have effective investment and M2 was therefore not enhanced， the money was still on their current accounts.
　　No matter they are SOEs， or private-owned enterprises， no matter they are in the over-capacity industry or in some new energy fields， the situation of holding money on their current accounts exists.
　　Sources from Taiyuan I&S Group disclosed that， some coal enterprises had deposits of as high as several billion yuan and Taiyuan I&S Group` deposit this year was around 1 billion yuan higher than previous years. “In the past， coal enterprises didn`t need to reserve capital in advance and loans transfer at the expiry date would work. But this year， default events concerning corporate bonds happened again and again， coal enterprises` debts reached as high as tens of billion yuan， and they had to cumulate capital to ease off repayment pressure.”
　　New energy industries couldn`t escape such fates either. One state-owned large new energy company in Central China expanded its investment scale of photovoltaic power and winder power stations last year， and its layout of main businesses wasn`t slowed down. But this year， most of its idle fund was spent as debt repayment.
　　Mr Zong from Bank of China said， “Even if companies did invest， it was not about entity investment but financial investment， preferably shortterm investment.” If a group owns a finance company， it will do some valueadded short term investment in interbank markets， but this year， the yield rate fell obviously from previous years.
　　Industry expert said， monetary policy is effective but limited， and financial policies are needed to coordinate. Financial policies mainly should be lowering corporate tax burden and enhancing fiscal deficit ratio.
　　The central bank data shows， newly-added loans reached 477.3 billion yuan in July and housing mortgage loans became the main contributor. Residents` long-term loans accounted for 102% of newly-added loans， hitting a new historical high. The last historical high was at 77% in April.
　　Chief researcher from China Min- sheng Bank expressed that， this shows that demand for retail loans mainly in the means of mortgage loans is still strong. Macro researcher Mr Li from Huatai Securities said， residents` house purchase activities supported by increasing leverage propped up credit loans increases in July， but infrastructure loans saw rapid declines. Li said，“Since the beginning of the year， real estate and infrastructure loans have been the main force that keeps average newly-added RMB loans at high rate.” 　　Residents` housing loans stay around 500 billion yuan per month and the volatility is small； in previous years， loans were only over 300 billion yuan per month. This is mainly because house price keeps increasing and house purchasing leverage is intensified.
　　Private capital proved to be more sensitive. Take Beijing for example， during the first four months of 2016， around 80% of private capital entered the real estate market， which means structural reforms and transformations need strengthening.
　　Mr Chen， Senior researcher from Financial Research Center of Bank of Communications， holds that ， as the real estate heat faded away， even if local governments launched policies of purchase restriction and loan restriction， the July housing loans didn`t see immediate effect as the actual implementation of new policy needed more time. Differentiation of credit loan demand structure of residents and corporations has been somewhat intensified.
　　As regulation and control restart， under new housing policies in Shanghai， Shenzhen and Yangtze River Delta regions as well as supervision focusing on de-leveraging， will the momentum of housing loan increases at the next phase will continue？ And real estate leverage has been added to the extremity？
　　Residents ` long term loans increased by 47.73 billion yuan. It ap- peared to be higher than the entire newly-added loans of that month， but actually， its growth reduced by 8.66 billion yuan， which shows the house pur- chase heat has faded and the real estate investment faces challenge. Relevant data also supports this forecast from the side. Real estate investment related data from Jan to July released by NBS（National Bureau of Statistics） shows， investment in China`s real estate development from Jan to July reached 5.53 billion yuan with a Y-o-Y nominal increase of 5.3%， down 0.8% from that from Jan to June. Besides， land sizes bought by real estate developers had also slid. From Jan to July， developers` land purchase size reached 111.67 million square meters with a Y-o-Y decline of 7.8%.