The Chinese central bank has stressed the need for further adjustments to the lending structure of the domestic banking sector to support macroeconomic policy objectives.
The People’s Bank of China (PBOC) called for “firmly driving lending structure adjustments and expanding support for key areas and weak links,” at a meeting convened on 23 August to analyse monetary and credit conditions.
PBOC also called for “driving more funds towards scientific and tech innovation and green development, and more flows towards micro, small and medium-sized enterprises, individual industrial and commercial proprietors, and new-model rural business entities.”
“Further optimisation will become the marked trait of bank lending in future” said Zeng Gang (曾刚), deputy-chair of the National Institute for Finance & Developent (NIFD), to PBOC’s official news outlet.
“As the short-term shock of the pandemic gradually recedes, growth in the extension of bank loans will maintain consistency with growth in the real economy.
“In structural terms, the scale of real-estate lending will markedly decline, and the scale of loans to areas such as manufacturing, tech innovation, green lending, rural village revival and micro and small-enterprises will markedly increase.
“Structural optimisation requires that banks expand into new areas for loan extension, and in actuality financial regulators have already pointed out the direction.
“In future, what banks must do is increase corresponding loan support capability, further research industry arrangements, effectively perform strategic planning and improve risk control methods.”
“[PBOC’s] meeting to analyse monetary and credit conditions has sent the signals of ‘stable growth’ and ‘structural adjustment,'” said Liang Si (梁斯), researcher from the Bank of China.
Liang said that bank loan growth saw “ongoing optimisation” in the first half of 2021, with targeted support for manufacturing and micro-and-small enterprises.
Official data indicates that medium and long-term loans to the manufacturing sector saw 41.6% growth compared to the same period last year, while the financial inclusion micro-and-small enterprise loan balance was 17.7 trillion yuan, for growth of 31% compared to the same period last year.