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China Hits ‘Liquidity Trap’ as Low Rates Fail to Spur Bank Loans

  • Credit slows sharply in July amid property slump, weak growth
  • Risks of excess liquidity rising as M2 growth picks up: Ming
Updated on

China’s low interest rates are failing to spur lending in the economy, creating a challenge for policy makers as they try to bolster the nation’s fragile recovery.

Central bank data on Friday showed a sharp slowdown in aggregate financing, a broad measure of credit, in July, as new loans and corporate bond issuance weakened.