China’s Bank Loan Gauge Contracts for First Time in 19 Years
- Credit growth disappoints on weak demand, regulatory crackdown
- Policy easing likely to come but not on a big scale: Macquarie
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China’s bank loans to the real economy contracted for the first time in 19 years, a grim milestone that underscores why weak domestic demand has emerged as a major hurdle to the economy’s growth and recovery.
Yuan-denominated bank loans that exclude those extended to financial institutions shrank by 77 billion yuan ($10.7 billion) at the end of July from a month ago, according to data released Tuesday by the People’s Bank of China. That marked the first drop since July 2005, as more debt was repaid than taken out.