Core Viewpoint - The latest data from the central bank shows that as of the end of July, the broad money supply (M2) reached 329.94 trillion yuan, with a year-on-year growth of 8.8%, while the narrow money supply (M1) was 111.06 trillion yuan, growing by 5.6%. The narrowing gap between M2 and M1 indicates an improvement in the liquidity of funds and the efficiency of circulation, reflecting effective market stabilization policies and a recovery in economic activities [3][4]. Group 1 - As of the end of July, M2 balance was 329.94 trillion yuan, with a year-on-year growth of 8.8% [3] - M1 balance was 111.06 trillion yuan, with a year-on-year growth of 5.6% [3] - The difference in growth rates between M2 and M1 is 3.2%, significantly narrowed compared to the high point in September of the previous year [3] Group 2 - The new statistical criteria for M1 were implemented in January, showing a comparable M1 growth rate of -3.3% as of September 2024 [3] - The narrowing M2-M1 gap reflects enhanced fund activation and improved circulation efficiency, aligning with the trend of economic recovery [4] - M1 primarily represents the operating funds of enterprises, with large enterprises focusing on fund efficiency, while small and medium-sized enterprises tend to retain more liquid funds due to weaker financing capabilities [4][5]