People’s Shadow Bank of China

17 January 2020 By Pete Sweeney Follow @petesweeneypro

GDP grew 6.0% last quarter, but lending disappointed. A drive to cut bad debt while pushing banks to prop up small risky firms has squeezed healthier private companies. With informal, pricey credit moving to fill the gap, officials may have to tolerate a shadow loan revival.

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Context News

China’s economy grew 6.0% year-on-year in the fourth quarter of 2019, official data showed on Jan. 17, meeting the expectations of analysts polled by Reuters. Full-year growth was 6.1%, the slowest in 29 years but still within the government’s target of 6 to 6.5%.

Fixed-asset investment growth was 5.4% year-on-year in the January to December period.

Industrial output growth rose to 6.9% in December, up from 6.2% in the prior month. That beats analyst expectations of 5.9% on an annual basis.

Chinese banks extended 1.1 trillion yuan ($165.5 billion) in new yuan loans in December, down slightly from November and falling short of analysts' expectations, central bank data showed on Jan. 16. Total social financing, a broad measure of total credit provision, rose to 2.1 trillion yuan from 1.75 trillion yuan in November.

Context News

Fixed-asset investment growth was 5.4% year-on-year in the January to December period.

Industrial output growth rose to 6.9% in December, up from 6.2% in the prior month. That beats analyst expectations of 5.9% on an annual basis.

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