BNP Paribas economist Jacqueline Rong says new loans in China returned to normal in August, after massive lending to China Securities Finance to support the share market pushed new loans to 1.48 trillion yuan in July. New loans indicate China Securities Finance significantly scaled back intervention in August. Robust money growth suggested monetary conditions were loose in China, Rong said, but at the micro level enterprises were still complaining about tight funding and high funding costs. That reflected a long-standing structural problem: Chinese bank's preference for collateral, for state-owned enterprises, and short loan tenor amid rising non-performing loan ratios.
