China orders banks to ‘improve political positioning’ and boost lending after October financial data disappoints
- People’s Bank of China calls special meeting of top bankers to demand they boost lending to help stabilise the real economy
- Meeting comes three days after new financial data shows very weak bank lending in October
China’s central bank on Thursday ordered financial institutions to improve their “political positioning” and ensure adequate financing support for the real economy.
Financial institutions are responsible for adopting effective measures that create a sound environment for the country’s economic stabilisation, the People’s Bank of China told major banks at a credit meeting in Beijing.
China’s latest financial data paints a bleak economic outlook amid trade war with US
“All financial institutions must improve their political positioning to stay fully in line with the [Communist] Party Central Committee led by [President] Xi Jinping, and assist in serving the real economy,” the central bank said in a statement posted on its website.
The strongly worded statement comes after macroeconomic data for October released this week – particularly weak monetary and lending figures – continued to point to a gloomy outlook for the economy.
New loans in October fell by about half to 677 billion yuan (US$97.42 billion) from 1.38 trillion yuan in September, while aggregate financing, a broad measure of the country’s credit support for the real economy, shrank by about two-thirds to 728.8 billion yuan.
“Firms that experienced strong business expansion in previous years continue to face financing difficulties and high costs, as both [China’s} internal and external situations are complex and changing rapidly, ” said the statement.