China’s Banking Regulator Touts Efforts to Drive Recovery of Consumption

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The China Banking and Insurance Regulatory Commission (CBIRC) hopes to drive growth in Chinese consumption by pushing for banks to extend larger volumes of consumer credit to households.

CBIRC said that it has expedited the ongoing recovery of consumption in 2022, with consumer loans increasing by 158.9 billion yuan in 2022, according to figures released at a state press conference held on on 21 July.

In the first half of 2022 renminbi lending was 919.2 billion yuan more than the figure for the period last year, while banks and insurance companies invested in 6.6 trillion yuan in new bonds, for an increase of 3.3 trillion yuan compared to the figure for the same period last year.

As of the end of June financial inclusion small and micro-loans increased 22.6% year-on-year (YoY).

The first half saw 2.6 trillion yuan in new infrastructure loans, while manufacturing loans increased by 3.3 trillion yuan, 1.6 trillion yuan more than the same period last year. This included a 28.9% YoY increase in high-tech manufacturing loans.

The first half of 2022 saw the disposal of 1.41 trillion yuan in non-performing assets, for an increase of 219.7 billion yuan compared to the same period last year. As of the end of the second quarter the provisions coverage ratio for Chinese commercial banks was 203.8%, while the capital adequacy ratio was 14.87%.

CBIRC has also hailed efforts to drive reductions to the Chinese shadow banking sector, with a cumulative 380.6 billion yuan decline in entrusted loans and entrusted loans in the first half of 2022.