New bank loans in China fell in July, and key credit metrics weakened despite policymakers cutting interest rates and promising more support for China’s ailing economy.
Data from the People’s Bank of China showed on Friday that Chinese banks extended 345.9 billion yuan ($47.80 billion) of new loans in July, down 89 percent from June to the lowest level since the end of 2009 and well below analysts’ expectations.
Analysts expected new loans last month to drop sharply from 3.05 trillion yuan in June to 800 billion yuan, after record lending in the first half as the central bank tried to prop up sluggish consumption and investment. The reading was also well below 679 billion yuan in July 2022 while While lending in China usually tends to decline in July for seasonal reasons, the weak credit readings come days after other weak data showed that the world’s second-largest economy slipped into contraction last month while exports and imports fell, increasing pressure on Beijing to roll back more stimulus measures. power.
China’s top leaders pledged in late July to ramp up support for the economy amid a turbulent post-coronavirus recovery, followed by a raft of similar pledges from various government agencies. However, these measures have no effect on the ground, which disappointed investors and the continuation of the pessimistic view about the Chinese economy as a whole.
The central bank cut its benchmark lending rates in June by 10 basis points, the first such cut in 10 months. New cuts are expected for this year, and analysts say that may do little to quickly reverse the economic crisis as long as consumers and businesses remain in the mood to borrow more.
