China’s new bank loans tumbled in July, overall credit growth slowed significantly

 

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China’s new bank loans tumbled in July while the overall credit growth slowed significantly, as fresh COVID resurgence, concerns about jobs and a weakening property crisis made companies and consumers wary of taking on more debt.

Chinese banks granted 679 billion yuan of new loans in July, according to data released by the Peoples’s Bank of China (PBOC), below to expected 1.1 trillion yuan and sharply lower than the 2.81 trillion yuan in the previous month.

In breakdown, new bank loans to the household sector fell to 121.7 billion yuan in July, down from 848.2 billion yuan in the previous month, and new loans to the corporate loans slid to 287.7 billion yuan from 2.21 trillion in the previous month, showed the data.

Outstanding yuan loans grew 11% compared with 11.2% growth in June. Analysts had expected growth unchanged from June.

In the first seven months of the year, China’s bank loans increased by 14.35 trillion yuan, rising by 515 billion yuan from a year earlier, showed the data.

China’s M2 money supply grew by 12% in July from a year earlier, according to data released by the PBOC, compared to expected 11.4% growth, accelerating by 0.6 percentage point from the previous month and by 3.7 percentage points from a year earlier.

China’s total social financing, a broad measure of credit and liquidity in the economy, decreased to 756.1 billion yuan in July, compared to expected 1.3 trillion yuan and sharply down from 5.17 trillion yuan in the previous month. That’s down 319.1 billion yuan from a year earlier.

Growth of outstanding total social financing slowed to 10.7% in July from 10.8% in June.

In the first seven month of the year, China’s total social financing increased by 21.88 trillion yuan, 2.89 trillion yuan higher than the same period last year, showed the data.