China floods economy with cash with coronavirus outbreak set to hit economic growth hard
- Commercial banks extended 3.34 trillion yuan (US$477 billion) of credit in January, an all-time high for bank lending in a single month, the People’s Bank of China said
- Aggregate financing also reached a new high of 5.07 trillion yuan (US$724 billion)
Chinese banks flooded the economy with a record amount of bank credit at the start of 2020, a move aimed at protecting fragile growth amid the coronavirus outbreak.
Commercial banks extended 3.34 trillion yuan (US$477 billion) of credit in January, an all-time high for bank lending in a single month, the People’s Bank of China said on Thursday. The figure is almost equivalent to the country’s total bank loans for the whole of 2007.
The net increase of medium and long-term lending for corporations reached 1.66 trillion yuan, showing banks’ support for large investment projects, while medium and long-term household loans, which often refer to mortgages, stood at 749.1 billion yuan (US$107 billion).
Aggregate financing, which includes bank loans, entrusted loans, banker’s acceptance bills, bond and equity financing, also reached a new high of 5.07 trillion yuan (US$724 billion), an increase of 388.3 billion yuan (US$55 billion) from the same period last year.
Will this lead to a historical high this year? Does it mean an end to the deleveraging campaign? Debt concerns will certainly return from a long-term perspective