UPDATE 1-China asks banks to step up credit support for the economy

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BEIJING, Nov 21 (Reuters) – Chinese banks are expected to step up credit support for the economy, including increasing medium- and long-term lending to support infrastructure investment, the central bank and regulator said on Monday. banking and insurance regulation. Hurt by COVID-19 restrictions and a sharp decline in real estate, China’s economy is struggling to get back on its feet, even after a series of government measures this year to boost domestic demand.

“We will do our utmost to provide financial services to stabilize investment, promote consumption and ensure people’s livelihood,” the People’s Bank of China and China Banking and Securities Regulatory Commission said. insurance in a press release following a meeting on bank credit.

“We will strengthen credit support in key areas, weak links and sectors affected by COVID-19, and do our utmost to promote continued economic recovery,” the statement said.

New bank loans

in China fell more than expected in October from the previous month, while overall credit growth slowed as restrictions imposed to curb COVID outbreaks and a slump in the real estate sector weighed on credit demand and trust.

Commercial banks should increase medium and long-term lending as part of a policy bank financing tool to help boost infrastructure investment, the statement said.

Under the program, the authorities allowed political banks to issue 300 billion yuan ($41.86 billion) of bonds to raise capital for key infrastructure projects, and granted political banks 800,000 billion yuan of new credit quotas to finance these projects.

National commercial banks, which include major public lenders, should take the lead in extending credit to support the economy, including for small businesses, independent businesses and support demand for credit from manufacturers and services.

China’s economy grew just 3% in January-September, and analysts generally expect its full-year expansion to be just over 3%, well below the annual target of around 5.5% for 2022.

Regarding the real estate sector, the authorities said they should stabilize loans to developers and construction companies, and also support a reasonable demand for personal loans for housing.

China’s real estate investment fell at the fastest rate in 32 months in October and overall new bank lending fell as tight COVID-19 restrictions and real estate issues weighed.

A recent series of support measures, including loan repayment extensions, aimed at improving liquidity in the real estate sector, supported market sentiment. ($1 = 7.1665 Chinese yuan renminbi) (Reporting by Beijing Newsroom; Editing by Kim Coghill)