New bank loans in China likely fell in December but lending for all of 2019 still set a record, a Reuters poll showed, as the central bank eased policy to support the slowing economy.
Chinese banks are estimated to have issued RMB 1.194 trillion ($171.7 billion) in net new RMB loans last month, down from RMB 1.39 trillion in November, according to the median estimate in the survey of 31 economists.
If December data, due during the coming week, is in line with forecasts, total new lending in 2019 would hit RMB 16.88 trillion, up 4.3% from the previous record of RMB 16.17 trillion in 2018. Analysts say faster credit expansion will be key to stabilizing economic growth, which cooled to 6% in the third quarter of 2019, the slowest since the early 1990s.
To spur lending, the People’s Bank of China (PBOC) has cut banks’ reserve-requirement ratios (RRR) eight times since early 2018 and pumped out trillions of RMB in liquidity. But the central bank has been wary of rising debt and high property prices and looks increasingly reluctant to ease more aggressively. The PBOC has also lowered its key lending rate in recent months, with more cuts expected possibly before the end of this month.