Easing in new credit reflects shadow banking slowdown
Aggregate financing for last month comes in at 938.7 billion yuan, lagging a 1.31 trillion yuan estimate, amid a tightening in the loan market
The mainland's broadest measure of new credit trailed analysts' estimates last month, indicating a slowdown in shadow banking following the near-default of a trust investment product.
Aggregate financing was 938.7 billion yuan (HK$1.18 trillion), the People's Bank of China said yesterday, compared with the 1.31 trillion yuan median estimate of analysts surveyed. New local-currency loans were 644.5 billion yuan, accounting for about 69 per cent of aggregate credit, the largest proportion since July.
Reining in a US$6 trillion shadow-finance industry would help cut risks of financial turmoil while buoying chances that Beijing will boost pro-expansion policies to meet a growth target of about 7.5 per cent this year.
Exports unexpectedly fell last month by the most since the global financial crisis, while producer prices had the biggest drop since July.
"Off-balance-sheet activity has been curtailed and contained," said Ding Shuang, senior China economist at Citigroup. "The policy stance is very obviously less accommodative than in the first half of last year. Under those macro policies, we think it would be quite challenging to achieve 7.5 per cent [gross domestic product] growth."
The policy stance is obviously less accommodative than in the first half of last year
People's Bank of China governor Zhou Xiaochuan may elaborate on the central bank's policy in a briefing today in Beijing with other mainland financial regulators.