(Yicai) July 16 -- China’s social financing structure continued to optimize in the first six months as investment and financing activity among technology companies gathered momentum. The share of corporate direct financing, including bonds and stocks, in newly added social financing increased from a year earlier, according to the latest data.

In the six months ended June 30, net financing from bonds and equity by China’s non-financial enterprises accounted for 11.3 percent of newly added social financing, a jump of 5.6 percentage points from the same period last year, the People’s Bank of China said yesterday.

Of that, net bond financing surged 77 percent year on year to CNY2.1 trillion (USD310.3 billion), while equity financing soared 72 percent to CNY293.3 billion, it said.

Continued improvements in China’s bond market framework, together with supportive policies such as bond risk-sharing mechanisms, have created a more favorable environment for corporate bond issuance, an industry expert told Yicai. Lower bond market interest rates in recent months have also contributed to the increase in net corporate bond financing.

The investment boom driven by advances in artificial intelligence, chips and other high-tech industries has significantly boosted financing demand among innovation-focused companies. Strong performance by technology stocks in China’s mainland equity market during the first half enabled many high-tech firms to access the capital markets, leading to an increase in equity financing, the expert said.

In terms of overall financing activity, China's newly added social financing slumped 8.7 percent in the first half from a year earlier to CNY20.8 trillion (USD3.1 trillion), according to PBOC data. The decline in newly added financing was primarily due to a decrease in new bank loans and reduced net government bond financing.

In the first six months, new loans to the real economy issued by the banking system slumped 14.9 percent from the same period last year to CNY10.8 trillion (USD1.6 trillion), while the net financing scale of government bonds tumbled 15.7 percent to CNY6.4 trillion.

The continued adjustment in China’s real estate market and ongoing efforts by local governments to restructure their debt have reduced lending to property developers and government-related financing, weighing on overall growth in newly added social financing, the expert said.

At the same time, emerging industries are significantly less dependent on bank credit than traditional capital-intensive sectors. As a result, the economy’s debt intensity continues to decline, indicating that financial support for the real economy is increasingly reflected in a more efficient financing structure rather than through overall credit expansion, the expert added.

Editors: Dou Shicong, Kim Taylor