Skip to content
Subscriber Only
Shuli Ren

China’s Burst of Small-Business Lending Is a Sham

The new “inclusive financing” metric doesn’t include as much as before. The statistics sure look better.  

Let’s run those numbers again.

Let’s run those numbers again.

Photographer: Zhang Peng/LightRocket/Getty

In March, Chinese Premier Li Keqiang vowed to bolster opportunities for private businesses pinched by the U.S. trade war, saying commercial banks would increase lending to small companies by 30%. It marked the first time an annual report on the government’s work has made a specific target for lending to small companies. 

China’s biggest banks have passed with flying colors. By September, the value of outstanding loans to small businesses at the top five lenders jumped 48% from the end of 2018. “Inclusive financing,” or loans to small firms, soared 41%, according to the People’s Bank of China.