China Bank Lending Will Reduce
According to the latest Reuters poll, China bank lending reduced in August comparing to July and policymakers resorted to boosting conditions and business confidence, shrugging off threats from the trade tension with the United States. That is, China's banks extended 1.3T yuan in net new loans in August, down from 1.45T yuan in July.
As we know, China’s Central Bank has already lowered its RRR and began ramping up spending on big-ticket infrastructure projects aiming to improve domestic demand and investment growth. And, the government is expected to come up with even more tools.
Total new bank loans soared 19% from 10.48T yuan in 2018, almost reaching a yearly maximum. Combined trust loans, entrusted loans and undiscounted bankers' acceptances dropped 488.6B yuan in July. Annual growth in outstanding TSF (total social financing) hit a minimum at 10.3% in July. The weighted average lending rate for non-financial firms lifted 1 bps to 5.97% in Q2. The People’s Bank of China is scheduled to publish August lending and money supply data next week.