Economy

Chinese Banks Urged to Increase Lending to Private Sector, Says Central Bank Official, According to Reuters

Beijing – An official from China’s central bank has urged financial institutions to increase lending to private companies during a recent meeting that included financial regulators, corporations, and lenders, according to the state-owned Securities Times.

Ma Jianyang, deputy head of the financial market department at the People’s Bank of China (PBOC), stated that relevant financial departments are developing policy documents aimed at this objective. The central bank plans to require financial institutions to establish annual targets for providing services to private firms and to actively expand loans for companies seeking financing for the first time.

New bank loans in China experienced a significant drop in July, alongside declines in other key credit indicators, despite recent interest rate cuts and pledges from policymakers to enhance support for the struggling economy. Analysts have reduced their growth predictions for the year to below the government’s target of around 5%, taking into account the worsening situation in the property sector and declining consumer spending.

Investment from private companies decreased by 0.5% in the first seven months of the year, a sharper decline compared to the 0.2% drop recorded in the first half.

The meeting was attended by representatives from the Shanghai and Shenzhen stock exchanges, major banks, and at least 11 private businesses, including energy equipment manufacturer Titan Wind Energy and real estate firms Longfor Group and Seazen Holdings.

In addition, some state-owned banks are reportedly preparing to reduce interest rates on existing mortgages—a significant move as this marks the first time since the global financial crisis that such measures have been taken in China.

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