PBOC Survey Finds over 70% of Banks Believe Chinese Economy and Monetary Policy Are Back to Normal

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A new survey from the Chinese central bank has found that the majority of domestic lenders believe that the economy and key policy settings have already returned to normal in the wake of COVID-19.

The National Bankers Survey (全国银行家问卷调查) for the first quarter of 2021 conducted by the People’s Bank of China (PBOC) found that its Banker Macro-economic Temperature Index (银行家宏观经济热度指数) had risen 8.8 percentage points compared to the previous quarter to hit 42.4%.

71.5% of bankers believe that China’s macro-economy is currently “normal,” for an increase of 8.9 percentage points compared to the preceding quarter. 21.8% believe that it is “cool, ” for a decline of 13.1 percentage points.

The Banker Macro-economic Temperature Expectations Index (银行家宏观经济热度预期指数) that focuses on the next quarter was 48.3%, for an increase of 5.9 percentage points compared to that for the current quarter.

The Monetary Policy Perceptions Index (货币政策感受指数) stood at 51.0%, for a decline of 7.1 percentage points compared to the fourth quarter, and 21.8 percentage points compared to the same period last year.

73.8% of Chinese bankers surveyed believe that monetary policy is “moderate” at present, for an increase of 1.4 percentage points compared to the previous quarter, while 14.1% believe that it is “loose,” for a decline of 7.9 percentage points.

The Monetary Policy Perceptions Expectations Index for the next quarter is 48.8%, for a decline of 2.2 percentage points compared to that for the current quarter.

The Overall Lending Demand Index for Q1 was 77.5%, for an increase of 5.9 percentage points compared to the previous quarter, and 11.6 percentage points compared to the same period last year.

For the manufacturing sector the loan demand index was 72.2%, for a rise of 3.6 percentage points compared to the fourth quarter, while for infrastructure it was 70.3%, for a rise of 5.3 percentage points.

The wholesale and retail sector loan demand index was 67.0%, for a rise of 2.7 percentage points compared to the preceding quarter, and for real estate enterprises the index was 53.2%, for a rise of 2.1 percentage points.

The loan demand index for large-scale enterprises was 63.8%, for an increase of 4.5 percentage points compared to the preceding quarter. For medium-sized enterprises it was 66.8%, for a 3.9 percentage points rise, while for micro and small-enterprises it was 76.5%, for an increase of 1.8 percentage points.

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