Bank lending above forecasts as total social financing plummets
Print Edition
BANKS in China lent more than expected in July, supporting a positive economic outlook.
Meanwhile, total social financing fell to a 21-month low, as regulators toughen their stance over shadow banking.
Lenders extended 699.9 billion yuan (US$114.2 billion) local currency loans last month — 159.8 billion yuan more than July last year, the People’s Bank of China said yesterday.
That compared with median forecast of 665 billion yuan from a survey of economists compiled by Reuters.
Total social financing — an indicator of overall liquidity which includes funds raised from banks, bonds, equity financing, foreign direct investment and private sources — was 808.8 billion yuan, 243.4 billion yuan less than July 2012.
New yuan loans accounted for 87 percent of the total, the most since September 2011.
M2, a broad measure of money supply, accelerated to 14.5 percent — 0.5 percent higher than June and 0.6 percent higher than July last year, according to the central bank.
“The data is generally positive in line with July economic indicators,” said Li Zhiqiang, chief analyst at China Minsheng Banking Corp.
“The size of new loans was reasonable to support economic growth.”
He said the rising proportion of new loans is normal as the central bank has tightened controls on liquidity, but the alternative fundraising methods will recover as the market become better regulated.
Also yesterday, the National Bureau of Statistics said consumer prices expanded 2.7 percent in July from a year earlier — the same as in June.
The relatively low reading has led to speculation that China will have more room to carry out stimulus policies.
Earlier this week, the General Administration of Customs reported trade rebounded in July, with growth of both exports and imports turning positive after demand in the world’s major economies recovered.
Exports rose 5.1 percent from a year earlier to US$185.9 billion last month, reversing a 3.1 percent decline in June.
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