China Credit Growth Slows Amid Property, Evergrande Troubles
- Both lending and total credit data were weaker than expected
- Longer-term loans to households fall 26% in September
Apartment blocks under construction in the Nanchuan area of Xining, Qinghai province, China.
Photographer: Qilai Shen/BloombergChina’s credit growth slowed in September, as weakness in the property market amid the Evergrande crisis weighed on financing and lending activities, despite the central bank’s call to stabilize credit expansion.
The slump is mainly a result of tightened financing to the property sector and reduced shadow banking activities related to the industry, according to Zhou Hao, senior emerging markets economist at Commerzbank AG. China’s major developers saw their sales plunge in September, after home sales in big cities dropped in August, and while Zhou says the weaker growth was “within expectations,” he predicts the PBOC will make a small cut to the benchmark interest rate in October.