Mainland banks face a paucity of go-to, qualified borrowers as they attempt to make use of the RMB1.2 trillion (US$193.5 billion) of liquidity freed up by the central bank’s cut to their reserve requirement ratio, South China Morning Post reported, citing financial analysts. As the economy has slowed and debt mounted, the threat of default at private and even state-run firms has grown, meaning banks’ time-tested strategy of lending to state-owned enterprises on the assumption their investments would be guaranteed by the government no longer holds water.
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