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China’s Covid Outbreak Highlights Weak Lending as Borrowers Hold Back

  • Loan demand remains weak as economy takes hit from Covid
  • PBOC says it wants to improve monetary policy transmission
Bloomberg business news
China’s Covid Outbreak Worsens as Shanghai Cases Top 26,000
Updated on

China’s central bank is struggling to drive up lending in the economy despite cutting interest rates and giving banks a cash boost. 

With a worsening Covid outbreak locking down mega cities Shanghai and Shenzhen, worries about jobs and incomes mean businesses and consumers are unwilling to take on more debt. Banks are reluctant to extend more loans too as a property downturn drives up bad debts and squeezes profits.