China’s August new bank loans jump more than expected; credit growth quickens
NEW bank lending in China beat expectations by nearly quadrupling in August from July, as the central bank sought to shore up economic growth amid soft demand at home and abroad.
Chinese banks extended 1.36 trillion yuan (S$253.2 billion) in new yuan loans in August, up from 345.9 billion yuan in July, according to People’s Bank of China data released on Monday (Sep 11).
Analysts polled by Reuters had predicted new yuan loans would rise to 1.20 trillion yuan in August. The new loans were higher than 1.25 trillion yuan in August last year.
“Credit growth improved modestly in August, as the policy measures helped the economy to stabilise,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management. “Mortgage loans rebounded, which indicates the rate cuts and policy easing in the property sector helped to boost buyers’ sentiment.”
Household loans, including mortgages, rose to 392.2 billion yuan in August, versus a contraction of 200.7 billion yuan in July. Corporate loans rose to 948.8 billion yuan from 237.8 billion yuan in July.
Premier Li Qiang said earlier this month that China is expected to achieve its 2023 growth target of around 5 per cent, but some analysts believe the target could be missed due to a worsening property slump, weak consumer spending and tumbling credit growth.
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To support the economy, the government has rolled out a series of policy measures in recent months, including steps to spur housing demand. Central bank officials have pledged to use policy tools, such as reserve requirement ratio cuts, to ensure reasonably ample liquidity.
Broad M2 money supply grew 10.6 per cent from a year earlier, central bank data showed, below estimates of 10.7 per cent forecast in the Reuters poll. M2 grew 10.7 per cent in July from a year ago.
Outstanding yuan loans grew 11.1 per cent in August from a year earlier.
This was in line with expectations and matched growth in July.
Annual growth of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, quickened to 9.0 per cent in August from a year earlier and from 8.9 per cent in July.
TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.
In August, TSF rose to 3.12 trillion yuan from 528.2 billion yuan in July. Analysts polled by Reuters had expected August TSF of 2.46 trillion yuan.
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