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Banking & finance
EconomyChina Economy

China’s credit demand weak in April despite policy support and strong industrial profits

Lending growth slows as borrowing demand from households and businesses remains weak

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An elderly man walks past a bank branch in the Central Business District in Beijing in April. Photo: EPA-EFE
Karen Tianin Beijing
China’s April lending data points to persistently weak borrowing demand among households and businesses, despite a relatively loose monetary policy and strong industrial activity and profits.
Banks extended a total of 8.59 trillion yuan (US$1.26 trillion) in new yuan loans in the first four months of this year, with lending barely rising in April, according to data released by the People’s Bank of China (PBOC) on Thursday.
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The rare monthly fall in April – only the second in the past decade – comes as household and corporate appetite for debt remains at historic lows.

Data released by the Beijing-based think tank National Institution for Finance and Development (NIFD) showed household debt contracted 0.4 per cent year on year in the first three months of this year. That marked the first negative growth since the third quarter of 1995, it said.

Corporate debt grew by only 7.8 per cent, also near a record low.

Total social financing – a broad gauge of financing demand that also includes bond and equity financing – reached 15.45 trillion yuan from January to April, 893 billion yuan less than the same period a year ago. The April figure stood at 620.7 billion yuan.

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In its first-quarter monetary policy report released earlier this week, the PBOC said financing conditions remained “relatively accommodative”, citing stronger lending growth in the technology and green sectors.

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