Investors remain nervous about the potential impact of Chinese lending restrictions on global economic growth. In recent days, it was reported
that several banks had ordered some branches to suspend new lending for the rest of this month since activity was getting above target. Recall that on December 16, 2009, the Chinese authorities instructed the banks that new loans were not to exceed 7.5 trillion Yuan ($USD 1.1 trillion) in 2010. This is down from 9.5 trillion Yuan in 2009 but it is still more than twice the 2008 level.
As today’s Hot Chart shows, the other thing to keep in mind is that in order to achieve the 2010 loan target, the six-month cumulative sum of new loans must actually accelerate significantly from its December 2009 level of 2.2 trillion Yuan (most of the new loans in 2009 took place in the first half of the year). As such, we do not view China’s 2010 loan target as being a significant drag on growth. We are in agreement with the just-released IMF projection which now pegs global GDP growth at close to 4% this year (revised from 3.1%).
NBF Economy and Strategy Group
The next chart from The China Daily proves NBF’s point. It could be that both corporations and banks anticipate restrictive measures during the last part of the year and pile up in the early part.
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