Credit growth slows on mainland China
Aggregate financing falls as Beijing reins in shadow banking activities
The mainland's broadest measure of new credit fell more than estimated last month, suggesting the authorities are trying to keep shadow finance risks in check as leaders map out a blueprint to sustain growth.
Aggregate financing was 856.4 billion yuan (HK$1.09 trillion), the People's Bank of China said on Monday, below all nine projections in a survey. New loans totalled 506.1 billion yuan, compared with the 580 billion yuan median estimate of analysts.
M2, the broadest measure of money supply, rose 14.3 per cent from a year earlier.
Slower credit would constrain growth while limiting risks of a financial crisis as Beijing seeks to replace the debt-fuelled investment and construction that have sustained expansion since the global financial crisis in 2008. President Xi Jinping and top Communist Party leaders yesterday concluded a four-day gathering to set the direction of economic reforms.
"This confirms our view that monetary policy has tightened and growth will slow going forward," said Zhang Zhiwei, Nomura's chief China economist.
With gross domestic product expansion on track to achieve this year's goal of 7.5 per cent, new bank loans and aggregate financing would decline this quarter from the previous period's "high levels", Zhang said.