- Bloomberg reported that Chinese banks have lent the most money to Chinese banks since December 2017, a decrease of 5%.
- The People’s Bank of China reported Thursday that 615 billion yuan was the amount of new loans made by institutions in October. This is 2.5 trillion yuan less than September.
- Beijing has intensified its lending policies in recent months. But corporate borrowing was still relatively low in October.
Bloomberg cites data from the People’s Bank of China that shows China’s financial institutions disbursed the lowest amount of money in China’s last month since December 2017. This is despite Beijing’s recent attempts to increase lending.
Chinese banks and businesses lent 615billion yuan ($84.8billion) in new loans to Chinese customers in October. This was a drastic drop from September’s 2.5billion yuan. Bloomberg reports that the aggregate financing dropped from 3.5 trillion Yuan to 908 Billion Yuan during the same period. This is the lowest October mark since 2019.
Goldman Sachs analysts pointed out that broad economic declines could have a negative impact on credit demand. Due to banks being less likely in the quarter’s beginning to lend cash, credit growth is more likely in October.
Despite mixed results, Beijing has been encouraging lending and financing in recent months. Policymakers, for example, allowed local governments to issue more bonds and directed policy banks to invest on infrastructure projects.
These measures did not stop the October decline in corporate borrowing, but companies are signaling a slowing of new investment.
China’s economy has been in decline since 2022 as leaders insist upon COVID-zero mandates. The factory and services activities have shrunk and in October, imports and exports both dropped for the first times in more than two years. Bloomberg reported.
China’s ailing property sector has continued to be a problem despite all these problems. This latest development is a government initiative that expands a financing program that assists private firms, including property-developers, sell more bonds.
