| With decrease in economic growth rate, China's economic development has evolved into a new stage which would be the norm which specifically is exhibited form three aspect:economic growth change, pattern transformation and macro policy change. Firstly, economic growth rate refers to the speed shift from higher to high level. GDP of third quarter of 2015 presents year-on-year growth of 7%as bottom line, which is China's first touch to red line since first quarter of 2009. Meanwhile, annual GDP of 2015 witnessed historically low level since 1990, only with rate of 6.9%.It shows that China's growth has dropped from decades of double-digit to single-digit, from single-digit of 8% kept for years of 6%, consistently beyond growth anticipation. Furthermore, PPI index, mirroring the price of industry, is kept as minus for as long as 43 years, which indicates greater downward pressure of economy. Additionally, this condition is accompanied by worse performance conventional manufacturing, exposing overcapacity to the spotlight. Industry structural optimization and upgrading is utterly urgent. In addition, the picture is also gloomy in real estate market. Since 2004, China's housing market price was on the rise until 2014 when supply demand was converted. Notable supply in excess of demand has been the critical turning point and continues at present as governmental policy of housing credit squeeze led to plunge in housing sells. Along with downward macro economy and changed supply-demand relationship, there has been a rise in non-performing loans(NPL) balance and ratio of commercial bank credit. At the end of 1st quarter of 2015,NPL increased by RMB 139.9 billion compared to 2014,achieving RMB 982.5 billion; NPL rose by 0.15%,reaching 1.39%.Meanwhile,commercial bank profit decrease substantially. Based on quarterly report of first quarter in 2015,net profit of multiple commercial banks decreased dramatically, which means growth rate falls into single-digit increase.Against such backdrop, facing unprecedented turning point in domestic economy and NPL bounce-off rise, central bank and the authority have introduced a series of police to alleviate the tension. Trillions of liquid funds have been released by central bank through decreasing deposit reserve ratio and interest and other monetary policies for multiple times. Besides, the government also unveiled a series of documents to stimulate housing market, for example, the decrease down payment ratio of second housing commercial loan to 40% and that of first housing provident fund loans to 20% with second to 30%.Real estate market is stimulated through shortening starting duration individual residency selling exempted from business tax.Therefore, the possible relationship between economic growth rate and NPL ratio and mutual impact has been at odds among China's and overseas scholars based on data index selection deference, which constitutes the focus of this paper. At the same time, the paper further explores whether the monetary policy would weaken the impact macro economy exerts on NPL ratio.This paper, from the macro perspective, discusses the influence of economic development, commercial residence price, financial policy and monetary policy imposed on China's commercial bank NPL ratio through multiple linear regression modeL Constructive suggestions are put forward for NPL management by banking and regulator. The paper is structured as follows:Chapter 1.Introduction. It presents topic selection background and significance, defining NPL ratio as core concept, exploring its evolving process, determining study scope stated in this paper. Besides, creation and drawback of this paper are present.Chapter 2. The literature review of domestic and foreigner's study on commercial Banks non-performing loan ratio. The possible relationship between economic growth rate and NPL ratio and mutual impact has been at odds among China's and overseas scholars based on data index selection deference, which constitutes the focus of this paper.Chapter 3. Macroeconomic factors affect the non-performing loan ratio of theoretical analysis.Chapter 4. The macro factors affect the non-performing loan ratio of empirical researchChapter 5. The conclusions and outlook of this paper.The research conclusion of this paper:1.Based on the multiple linear regression of non-performing loan ratio influence factors and the impulse response analysis found that the quarterly GDP growth rate negatively correlate with the non-performing loan ratio. Specifically speaking:the higher the rate of economic growth is, the lower the non-performing loan ratio will be. On the contrary, economic growth is weak, which will lead to non-performing loans rising. It also shows why the current state of the country's economic growth will rebound trend of non-performing loans.2.The price of the real estate market of our country commercial bank non-performing loan ratio has a negative correlation, the higher growth rate of housing prices, the lower the non-performing loans of commercial Banks.3.The spending of government have no significant impact on bank bad loans, which shows the government reduced the intervention of the guidance to commercial Banks through the fiscal policy at present. In a sense, de-administration in commercial bank has strengthened.4. Changes in the money supply and interest rate with the non-performing loans present a negative correlation. Show an increase in the money supply has the role of dilute non-performing loan ratio, and rising interest rates to raise barriers for money-borrowing enterprises to entry, which led to non-performing loan ratio is reduced.5. According to the results of variance decomposition, non-performing loans (NPL) mainly influenced by itself up front amount, on the contrary, the influence of the macro economic growth and the influence of monetary policy to its relatively small. When the macroeconomic effect non-performing loans, monetary policy can weak the influence of macroeconomic growth's influence to some extent, but has a certain time lag. The monetary policy, which can weak macro economic growth's influence, is weak in the early stage, and this kind of effect is more noticeable in the later. |
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