China's Credit Growth Slowed: Causes and Consequences
In August 2024, China's credit growth has slowed down, indicating a persistent lack of confidence among consumers and businesses. Data released by the People's Bank of China showed that total credit rose by only 1.25 trillion yuan (approximately 178 billion dollars), significantly below the expected 1.5 trillion yuan. This slowdown is occurring amid increasing economic uncertainty and weak consumer demand, prompting economists to express concerns about the sustainability of the country's economic recovery.
Funds issued for mortgage loans also experienced a sharp decline, indicating difficulties in the real estate sector. Amid the collapse of major developers and issues with home sales, consumers are becoming increasingly cautious in their financial decisions. The measures aimed at stimulating the economy have proven insufficient to restore confidence in the market.
Experts warn that if this trend continues, it could negatively impact the long-term growth prospects of the Chinese economy. Given the decreasing credit activity, along with global economic challenges such as changes in trade policies and currency fluctuations, China may need to reassess its economic strategies to ensure stable growth.
