China will tighten its supervision over the credit issued to local government financing vehicles, real estate developers and industries facing overcapacity, Bloomberg reported, citing the central bank’s quarterly monetary policy report posted on its website on Tuesday. The People’s Bank of China is taking steps to minimize potential contagion to the entire financial system from risks in those areas. China will also control lending to high-emission industries and those with overcapacity. Gross domestic product is projected to increase 7.3% this year as the government reins in credit, according to a Bloomberg survey, compared with an official target of about 7.5%.
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