MNI China Press Digest July 23: Yuan, Loans, ETFs

Highlights from Chinese press reports on Wednesday:

• Yuan exchange rate volatility may increase in the second half of the year, with possible twists in the China–U.S. economic and trade negotiations impacting the currency’s value, according to Wang Qing, chief macro analyst at Oriental Jincheng. The foreign exchange purchase ratio, which measures the willingness to purchase foreign exchange, has stood at 65% since April, down 3 percentage points year-on-year, reflecting the improved market expectation for the yuan in Q2, Wang noted. The yuan stabilised and then appreciated against the dollar in H1, Wang added. (Source: Yicai)
• China's outstanding balance of yuan-denominated loans issued by financial institutions reached CNY268 trillion at the end of Q2 2025, reflecting a 7.1% y/y increase and a CNY12.9 trillion expansion in H1, according to data from the People’s Bank of China. Total outstanding loans to corporates in both domestic and foreign currencies stood at CNY182 trillion, up 8.6% y/y, with an increase of CNY11.5 trillion during H1. Meanwhile, yuan real-estate loans totalled CNY53.3 trillion, up 0.4% y/y, an acceleration of 0.6 percentage points compared to the end of the previous year and an increase of CNY416 billion in the first half.
• The rapid expansion of ETFs tracking Shanghai’s technology-focused STAR Market reflects not only the improving fundamentals and quality of listed companies, but also ongoing enhancements to the market making framework and trading mechanism, an industry source told Yicai.com. As the STAR Market’s index architecture continues to evolve, future ETF products are expected to become increasingly specialised and diversified, further solidifying the market’s long-term investment ecosystem, the source added. According to Yicai.com, as of July 22, the number of STAR Market-linked ETFs had reached 96, with total assets under management exceeding CNY269 billion, representing a more than tenfold increase since the end of 2020.