China’s banks cut back on lending
(14 February 2012 – Asia) China’s banks remained stingy with lending in January, with lending falling 28 percent year on year.
Figures just released showed bank lending falling to US$117.3 billion (A$109.2 billion) in January, a 28 percent plunge year-on-year from US$163 billion.
Analysts believe the drop was caused by an excessive caution about re-igniting inflation and the government’s excessively tight restrictions on credit.
The January figure was 15 percent higher than the December loan total of US$101.8 billion. One analyst said it was the lowest December to January increase since 2007.
There is growing evidence that the world's second largest economy is slowing down as Eurozone woes and weakness in the United States hurts demand for Chinese exports, a key growth driver for China.
Regulators are inclined to give Chinese banks more time to meet tougher capital rules requirements.
The China Banking Regulatory Commission (CBRC) is expected to impose new capital supervision rules on banks from 1 July, but not as strictly as has been expected. CBRC will most probably give banks a longer grace period to meet tougher capital requirements intended to limit credit risks.
Analysts believe the drop was caused by an excessive caution about re-igniting inflation and the government’s excessively tight restrictions on credit.
The January figure was 15 percent higher than the December loan total of US$101.8 billion. One analyst said it was the lowest December to January increase since 2007.
There is growing evidence that the world's second largest economy is slowing down as Eurozone woes and weakness in the United States hurts demand for Chinese exports, a key growth driver for China.
Regulators are inclined to give Chinese banks more time to meet tougher capital rules requirements.
The China Banking Regulatory Commission (CBRC) is expected to impose new capital supervision rules on banks from 1 July, but not as strictly as has been expected. CBRC will most probably give banks a longer grace period to meet tougher capital requirements intended to limit credit risks.
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