Latest news with #XingZhaopeng
Qatar Tribune
18 hours ago
- Business
- Qatar Tribune
China's bank loans unexpectedly contract for first time in 20 years
Agencies China's new yuan loans contracted in July for the first time in 20 years as the economy struggled, falling well short of analysts' forecasts, but improvements in broader credit growth suggest the central bank is in no rush to ease policy. While new loans typically fall in July after strong gains in June when banks strive to meet quarterly targets, the latest reading was well below even the most pessimistic analyst's forecasts, pointing to weak private sector demand as Beijing tries to negotiate a durable trade deal with Washington. 'The July credit data was weak, but money supply exceeded expectations, reflecting the impact of last year's low base and debt resolution efforts,' said Xing Zhaopeng, senior China strategist at ANZ. 'At present, monetary policy has entered a period of observation, and a rate cut is unlikely in the short term. From the perspective of liquidity needs, a reserve requirement ratio (RRR) cut could also be delayed. Structural monetary policy remains the main tool for easing.' New yuan loans contracted by 50 billion yuan ($6.97 billion) in July, falling well short of analysts' forecasts and plunging from 2.24 trillion yuan in June, according to Reuters calculations based on data released by the People's Bank of China. That marked the first contraction since July 2005 and the largest monthly decline since December 1999, according to central bank data. Analysts polled by Reuters had expected new yuan loans last month to reach 300 billion yuan, compared with 260 billion yuan a year ago. Along with seasonal trends which buoyed June's tally, credit demand also had rebounded sharply that month as sentiment improved following rounds of trade talks in Europe and a tentative easing of trade tensions with the US. The central bank does not provide monthly breakdowns. Reuters calculated the July figures based on the PBOC's January-July data released on Wednesday, compared with the January-June figure. In the first seven months of the year, banks extended 12.87 trillion yuan in new loans, versus 12.92 trillion yuan in January-June, implying a net reduction of 50 billion yuan in July. Banks issued 13.53 trillion yuan in new loans in the same period last year. Household loans contracted 489.3 billion yuan in July, versus a rise of 597.6 billion yuan in June, according to Reuters calculations, as a prolonged property market crisis showed no signs of easing. Corporate loans plunged to 60 billion yuan from 1.77 trillion yuan in June. The PBOC release did not give any explanations for changes in credit trends. China's economy slowed less than expected in the second quarter due in part to policy support and as factories took advantage of a US-China trade truce to front-load shipments. But analysts warn the second half will be tougher as weak domestic demand, the property slump and rising global trade risks ramp up pressure on Beijing. The United States and China agreed early this week to extended their tariff truce for another 90 days, staving off triple-digit duties on each other's goods, but business confidence remains fragile, with some factories cutting selling prices, shifts and workers' pay. On Tuesday, China announced it would offer interest rate subsidies for businesses in eight consumer service sectors, as well as for individual consumers. Eligible businesses and consumers can receive an annual interest subsidy of one percentage point on loans. Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing.
Kuwait Times
20 hours ago
- Business
- Kuwait Times
China's bank loans unexpectedly contract for first time in 20 years
Credit data paints mixed picture as economy under pressure BEIJING: China's new yuan loans contracted in July for the first time in 20 years as the economy struggled, falling well short of analysts' forecasts, but improvements in broader credit growth suggest the central bank is in no rush to ease policy. While new loans typically fall in July after strong gains in June when banks strive to meet quarterly targets, the latest reading was well below even the most pessimistic analyst's forecasts, pointing to weak private sector demand as Beijing tries to negotiate a durable trade deal with Washington. 'The July credit data was weak, but money supply exceeded expectations, reflecting the impact of last year's low base and debt resolution efforts,' said Xing Zhaopeng, senior China strategist at ANZ. 'At present, monetary policy has entered a period of observation, and a rate cut is unlikely in the short term. From the perspective of liquidity needs, a reserve requirement ratio (RRR) cut could also be delayed. Structural monetary policy remains the main tool for easing.' New yuan loans contracted by 50 billion yuan ($6.97 billion) in July, falling well short of analysts' forecasts and plunging from 2.24 trillion yuan in June, according to Reuters calculations based on data released by the People's Bank of China. That marked the first contraction since July 2005 and the largest monthly decline since December 1999, according to central bank data. Analysts polled by Reuters had expected new yuan loans last month to reach 300 billion yuan, compared with 260 billion yuan a year ago. Along with seasonal trends which buoyed June's tally, credit demand also had rebounded sharply that month as sentiment improved following rounds of trade talks in Europe and a tentative easing of trade tensions with the US. The central bank does not provide monthly breakdowns. Reuters calculated the July figures based on the PBOC's January-July data released on Wednesday, compared with the January-June figure. In the first seven months of the year, banks extended 12.87 trillion yuan in new loans, versus 12.92 trillion yuan in January-June, implying a net reduction of 50 billion yuan in July. Banks issued 13.53 trillion yuan in new loans in the same period last year. Household loans contracted 489.3 billion yuan in July, versus a rise of 597.6 billion yuan in June, according to Reuters calculations, as a prolonged property market crisis showed no signs of easing. Corporate loans plunged to 60 billion yuan from 1.77 trillion yuan in June. The PBOC release did not give any explanations for changes in credit trends. PBOC in wait-and-see mode China's economy slowed less than expected in the second quarter due in part to policy support and as factories took advantage of a US-China trade truce to front-load shipments. But analysts warn the second half will be tougher as weak domestic demand, the property slump and rising global trade risks ramp up pressure on Beijing. The United States and China agreed early this week to extended their tariff truce for another 90 days, staving off triple-digit duties on each other's goods, but business confidence remains fragile, with some factories cutting selling prices, shifts and workers' pay. On Tuesday, China announced it would offer interest rate subsidies for businesses in eight consumer service sectors, as well as for individual consumers. Eligible businesses and consumers can receive an annual interest subsidy of one percentage point on loans. Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from Trump's tariffs. Wednesday's data also showed outstanding yuan loans rose 6.9 percent in July from a year earlier, slowing from 7.1 percent in June and hitting a record low. Analysts had expected 7.0 percent growth. Broad M2 money supply grew 8.8 percent from a year earlier, above analysts' forecast of 8.2 percent. M2 expanded 8.3 percent in June. The narrower M1 money supply rose 5.6 percent year-on-year, compared with 4.6 percent in June. Outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, rose 9.0 percent, up from a 8.9 percent pace in June and hitting the highest since February 2024. — Reuters
Reuters
a day ago
- Business
- Reuters
China July bank loans unexpectedly contract for first time in 20 years
BEIJING, Aug 13 (Reuters) - China's new yuan loans contracted in July for the first time in 20 years as the economy struggled, falling well short of analysts' forecasts, but improvements in broader credit growth suggest the central bank is in no rush to ease policy. While new loans typically fall in July after strong gains in June when banks strive to meet quarterly targets, the latest reading was well below even the most pessimistic analyst's forecasts, pointing to weak private sector demand as Beijing tries to negotiate a durable trade deal with Washington. "The July credit data was weak, but money supply exceeded expectations, reflecting the impact of last year's low base and debt resolution efforts," said Xing Zhaopeng, senior China strategist at ANZ. "At present, monetary policy has entered a period of observation, and a rate cut is unlikely in the short term. From the perspective of liquidity needs, a reserve requirement ratio (RRR) cut could also be delayed. Structural monetary policy remains the main tool for easing." New yuan loans contracted by 50 billion yuan ($6.97 billion) in July, falling well short of analysts' forecasts and plunging from 2.24 trillion yuan in June, according to Reuters calculations based on data released by the People's Bank of China. That marked the first contraction since July 2005 and the largest monthly decline since December 1999, according to central bank data. Analysts polled by Reuters had expected new yuan loans last month to reach 300 billion yuan, compared with 260 billion yuan a year ago. Along with seasonal trends which buoyed June's tally, credit demand also had rebounded sharply that month as sentiment improved following rounds of trade talks in Europe and a tentative easing of trade tensions with the U.S. The central bank does not provide monthly breakdowns. Reuters calculated the July figures based on the PBOC's January-July data released on Wednesday, compared with the January-June figure. In the first seven months of the year, banks extended 12.87 trillion yuan in new loans, versus 12.92 trillion yuan in January-June, implying a net reduction of 50 billion yuan in July. Banks issued 13.53 trillion yuan in new loans in the same period last year. Household loans contracted 489.3 billion yuan in July, versus a rise of 597.6 billion yuan in June, according to Reuters calculations, as a prolonged property market crisis showed no signs of easing. Corporate loans plunged to 60 billion yuan from 1.77 trillion yuan in June. The PBOC release did not give any explanations for changes in credit trends. China's economy slowed less than expected in the second quarter due in part to policy support and as factories took advantage of a U.S.-China trade truce to front-load shipments. But analysts warn the second half will be tougher as weak domestic demand, the property slump and rising global trade risks ramp up pressure on Beijing. The United States and China agreed early this week to extended their tariff truce for another 90 days, staving off triple-digit duties on each other's goods, but business confidence remains fragile, with some factories cutting selling prices, shifts and workers' pay. On Tuesday, China announced it would offer interest rate subsidies for businesses in eight consumer service sectors, as well as for individual consumers. Eligible businesses and consumers can receive an annual interest subsidy of one percentage point on loans. Beijing has ramped up infrastructure spending and consumer subsidies, alongside steady monetary easing. In May, the central bank cut interest rates and injected liquidity as part of broader efforts to cushion the economy from Trump's tariffs. Wednesday's data also showed outstanding yuan loans rose 6.9% in July from a year earlier, slowing from 7.1% in June and hitting a record low. Analysts had expected 7.0% growth. Broad M2 money supply grew 8.8% from a year earlier, above analysts' forecast of 8.2%. M2 expanded 8.3% in June. The narrower M1 money supply rose 5.6% year-on-year, compared with 4.6% in June. Outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, rose 9.0%, up from a 8.9% pace in June and hitting the highest since Febuary 2024. ($1 = 7.1752 Chinese yuan renminbi)
Business Recorder
2 days ago
- Automotive
- Business Recorder
Japan rubber futures track oil higher
SINGAPORE: Japanese rubber futures rose on Tuesday, tracking gains in crude oil prices amid optimism over China's policy measures to stabilise markets and an extension of a tariff truce between the United States and China. The Osaka Exchange (OSE) rubber contract for January delivery was up 4.6 yen, or 1.45%, at 322 yen ($2.17) per kg. The rubber contract on the Shanghai Futures Exchange (SHFE) for January delivery rose 140 yuan, or 0.89%, to 15,860 yuan ($2,206.12) per metric ton. The most-active September butadiene rubber contract on the SHFE gained 85 yuan, or 0.72%, to 11,825 yuan ($1,644.85) per ton. China's producer price index (PPI) fell 3.6% year-on-year in July, matching the near 2-year low recorded in June as extreme weather and global trade uncertainties contributed to price declines in some industries. However, Xing Zhaopeng, senior China strategist at ANZ, expects that current 'anti-involution' policy measures, designed to curb disorderly competition in sectors like autos, will begin to boost year-on-year PPI starting in August. Lower automobile prices pressure rubber tyre prices.
RTÉ News
3 days ago
- Business
- RTÉ News
China's July factory-gate prices miss forecast, deflation concerns persist
China's producer prices fell more than expected in July, while consumer prices were unchanged, underscoring the impact of sluggish domestic demand and persistent trade uncertainty on consumer and business sentiment. Factory-gate prices have been declining for more than two years, and the latest weekend data suggest early-stage efforts to tackle price competition have yet to yield significant results. Deflationary pressures have prompted Chinese authorities to address overcapacity in key industries. However, the latest round of industrial restructuring appears to be a pared-down version of the sweeping supply-side reforms launched a decade ago that were pivotal in ending a deflationary spiral. The producer price index (PPI) fell 3.6% year on year in July, National Bureau of Statistics (NBS) said, missing economists' forecast of a 3.3% slide and matching the near two-year low recorded in June. Extreme weather and global trade uncertainties contributed to price declines in some industries, Dong Lijuan, NBS chief statistician, said in a statement. However, on a month-on-month basis, PPI shrank 0.2%, improving from June's 0.4% drop. Despite the headline figures, some analysts see signs of easing deflationary pressure. Xing Zhaopeng, senior China strategist at ANZ, pointed to improvements in month-on-month PPI and year-on-year core CPI. He expects the current "anti-involution" policy measures - aimed at curbing disorderly competition in sectors like autos -to begin lifting year-on-year PPI from August. Still, other analysts remain cautious, noting that without demand-side stimulus or reforms to improve people's welfare, the measures may have limited impact on final demand. A prolonged housing downturn and fragile trade relations with the US also continue to weigh on consumer spending and factory activity. China's consumer price index (CPI) was flat year-on-year in July, compared with a 0.1% rise in June, NBS data showed, beating a Reuters poll forecast of a 0.1% slide. Core inflation, which excludes volatile food and fuel prices, was 0.8% in July from a year earlier, the highest in 17 months. Food prices fell 1.6%, following a 0.3% decline in June. Extreme weather added to the economic strain, with sweltering heat gripping much of China's eastern seaboard last month and heavier-than-usual downpours lashing the country with the East Asian monsoon stalling over its north and south. On a monthly basis, the CPI edged up 0.4%, against a 0.1% drop in June and exceeding forecasts for a 0.3% rise. "Nonetheless it is still unclear if this is the end of deflation in China," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. "The property sector has not stabilised. The economy is still supported more by external demand than domestic consumption. The labour market remains weak," he said.
