Analysts warn China financial situation remains weak despite rise in bank lending
- People’s Bank of China struggling to pump money into real economy even as Xi Jinping’s government seeks to offset economic slowdown due to the trade war with the United States
China’s financial conditions did not fundamentally improve in November even though banks greatly expanded their lending at the request of the government, analysts said.
The People’s Bank of China continues to struggle to pump more money into the real economy even as the government has boosted its efforts to offset a slowdown of the economy due to the trade war with the United States.
Banks in China issued 1.25 trillion yuan (US$181 billion) in net new loans in last month, nearly double the 697 billion yuan (US$101 billion) in new lending in October, according to the data released by the People’s Bank of China, China’s central bank.
The November rise was also slightly above median expectation for a gain of 1.20 trillion yuan, according to a Bloomberg survey.
Total social financing (TSF) – a broad measure of credit and liquidity in the economy that includes loans, bonds and non-traditional instruments – rose a net 1.52 trillion yuan in November, more than double the 728.8 billion yuan gain in October and above the market expectation for a 1.33 trillion yuan rise.