China Central Bank Urges Lenders to Rev Up Support for Real Economy
China’s central bank urged the nation’s lenders to step up support for the real economy and meet credit demand, as the world’s second largest economy faces increased downward pressure.
In a meeting with 24 financial institutions, the People’s Bank of China and China’s banking regulator urged lenders to “go all out to stabilize the fundamentals of the economy,” the PBOC said in a statement Tuesday.
The PBOC urged banks to fully utilize different policy tools and support “high-quality” economic growth by increasing credit “appropriately”. It also asked banks to keep a steady increase of property loans, after a series of policy-easing recently to save the economy from a prolonged property slump.
The central bank listed sectors–including small business, green development, technology innovation and energy supply–as the key sectors that should receive financial support from banks. It also asked banks to roll over and postpone loan repayment for small business, truck drivers and individuals hit hard by the pandemic, while accelerating loan issuance for businesses and individuals.
China’s new-loan growth collapsed in April, with home mortgage loans contracting due to massive lockdowns of cities and stringent Covid-19 control measures that hindered loan issuance and damped credit demand. Several major economic indicators, including consumer spending and industrial production, fell sharply from a year earlier in April, prompting investment banks to cut their forecasts.
Source: Dow Jones