Date
17 December 2017
China's looser lending policy will give priority to first-home buyers, small enterprises and infrastructure projects. Photo: Bloomberg
China's looser lending policy will give priority to first-home buyers, small enterprises and infrastructure projects. Photo: Bloomberg

China to increase credit amid slowing economy

China will boost lending and make loans cheaper to boost funding to the real economy as growth slows amid a crackdown on shadow banking.

Priority will be given to small businesses, major infrastructure projects and first-home buyers, Bloomberg reported Friday, citing the China Banking Regulatory Commission (CBRC).   

The CBRC may ease the ratio of loans to deposit by including some stable sources of deposits in the calculation to give banks more capacity to lend, vice chairman Wang Zhaoxing was quoted as saying.

China caps loans at no more than 75 percent of bank deposits. Banks are lending about 65 percent of their deposits, the report said.

Credit supply will be increased to ease financing difficulties for small businesses, make loan approvals more efficient and lower borrowing costs.

Policymakers will use open-market operations, required reserve ratio and other means to adjust liquidity and keep the money market stable, the report said.

Lenders are allowed to increase their tolerance of small-business loans that soured, Yang Liping, a CBRC director in charge of smaller national and city commercial banks, was quoted as saying.

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