36613
China Prioritizes Growth
World Economy

China Prioritizes Growth

China’s record expansion of credit in January reveals Beijing’s policy priorities. It sees avoiding a “hard landing” for the economy as more critical than imposing control over what some analysts call a debt “bubble”.
Several other strands of China’s broader economic policy were also discernible in the January lending numbers. Beijing wants to funnel relief to debt-laden companies, crank up investment, boost the property market, pay off foreign loans and use the bond market to effectively bail out local governments, Yahoo reported.
“This strategy is to help avoid a hard landing in the economy in 2016, though at the cost of continuing to fuel the credit bubble,” wrote David Hensley of JPMorgan in a research note.
Though the jump in lending was partly driven by seasonal influences, it was clear from the composition of lending that Beijing, which wields considerable influence over its financial sector, was also seeking to stimulate activity in the real economy.
Medium and long-term corporate loan growth—the portion of lending that tends to be channeled most directly to long-term productive investments—rose sharply, rising 205% month-on-month and 73.2% year-on-year to Rmb1.06 trillion ($162.6 billion).
“This suggests that lending to infrastructure projects is increasing and that earlier bottlenecks in the funding of these projects are being cleared,” according to a research note from FT Confidential Research, a unit of the Financial Times.
Total renminbi loans rose to a monthly record high of Rmb2.51 trillion in January, up from Rmb597.8 billion in December to form the main portion of a total Rmb3.42 trillion in total social financing, the broadest official measure of credit expansion. This figure, also a monthly record, was nearly double the Rmb1.81 trillion in December’s TSF.

Short URL : http://goo.gl/fqSgtg
  1. http://goo.gl/0aPHNT
  • http://goo.gl/IRjR7c
  • http://goo.gl/2W3Byd
  • http://goo.gl/CXwfUI
  • http://goo.gl/u2MSFS

You can also read ...

The World Bank forecasts Russia's economy will grow by 1.7% this year and next, and by 1.8% in 2019.
The economy in Europe and Central Asia will grow 2.2% in 2017...
US Unfreezes Sudan Bank A/Cs
The United States has unfrozen bank accounts in Sudan after...
Participants pose for a family photo during the opening ceremony of D8 Organization for Economic Cooperation Summit in Istanbul on Oct. 20.
Turkey's Foreign Minister Mevlut Cavusoglu on Thursday said...
GM Closure Ends Australia’s Car Manufacturing Industry
Australia’s near 100-year automotive industry ended on Friday...
Digital Changes to Better Shape Asean Economy
Member states of Asean must be ready to embrace technological...
Wall Street Banks Sound Alarm on Stock-Market Correction
The S&P 500 hasn't seen a correction in almost two years....
Italy Q3 Growth at 0.5%
Italy’s economic growth improved slightly in the third quarter...
Despite intensifying property curbs and higher mortgage rates, Chinese banks issued $664.70 billion of property loans in the first nine months of this year.
China's central bank governor has warned the country's...

Trending

Googleplus