China’s latest financial data paints a bleak economic outlook amid trade war with US
- New yuan loans, a key source of funding for growth, halved in October from September
- Fiscal revenue, the source of government efforts, recorded a rare drop in October from the same month a year earlier
China’s financial condition weakened in October, pointing to a further deceleration in the world’s second-biggest economy amid the trade war with the United States.
While Beijing has been pressing the country’s banks to boost lending to the “real economy”, newly granted loans nearly halved to 677 billion yuan (US$97.32 billion) in October, from 1.38 trillion yuan (US$198.39 billion) in September, according to data released by the People’s Bank of China on Tuesday.
While October is a seasonally weaker month for Chinese credit data, the fall was sharper than all economists’ estimates.
Total social financing – a broad measure of various forms of credit support to economic growth such as loans, bonds and trust investments – shrank to 728.8 billion yuan in October, or just a third of the 2.17 trillion yuan of September, the central bank data showed.
It also marked the lowest reading since January 2017, the first month for which comparable data was available.
As support to economic growth from China’s banking system has dried up despite Beijing’s push, the government’s fiscal revenue has dropped. The country’s fiscal revenue fell 3.1 per cent in October from a year earlier, the first fall in 2018, according to the data released by Ministry of Finance on Tuesday.