China Credit Rebound Masks Still Subdued Consumer Borrowing
- Aggregate financing and new loans both exceed expectations
- Rise mostly due to short-term company loans, government bonds
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China’s credit picked up more than expected in May, although that was largely attributed to a jump in government bond sales and a rise in short-term lending, suggesting borrowing by consumers and businesses remains subdued.
Aggregate financing was 2.79 trillion yuan ($417 billion), the People’s Bank of China said Friday, up from 910 billion in April. Financial institutions offered 1.89 trillion yuan of new loans in the month, but more than 60% of those loans were short-term, indicating that companies and households are still reluctant to boost borrowing to buy houses or invest.