Chinese banks granted a record number of new loans in January demonstrating Beijing’s attempts to stabilise development in the second-largest economy in the world. At 4.92 trillion yuan ($684 billion), the new loans denominated in yuan set a record high, surpassing the 1.17 trillion yuan in December and the 4.9 trillion yuan ended in January 2023. The total financing, which comprises stock market funding, bonds, and bank lending, was 6.5 trillion yuan last month—506.1 billion more than it was a year ago.
Beijing has resisted enacting huge stimulus, instead providing fiscally prudent intervention. In December, policymakers maintained the tone of targeted assistance and responsible monetary policies.
It is generally anticipated that the government would set a 5% GDP growth target for 2024. With the announcement of a 50 basis-point reduction in the reserve requirement ratio for commercial banks, the People’s Bank of China (PBOC) has injected 1 trillion yuan worth of liquidity into the market. Additionally, it reduced the lending rate by 25 basis points in order to support the agricultural and small business sectors.
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