China banks issue fewer loans in Dec despite surprise rate cut
Firms seeking funds are further driven into shadow banking system
Beijing
CAUTIOUS Chinese banks issued far less credit in December than expected despite a surprise rate cut by the central bank, driving cash-starved companies into the shadow banking system in a major blow to the government's financial reform efforts.
The weaker-than-expected loan data indicates that Beijing's traditional reliance on credit to spark the economy is losing its effectiveness, posing a further challenge to policymakers as they look for ways to avert a sharper slowdown in 2015.
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