China’s New Bank Loan Issuance Grows Rapidly

A new financial record in China: in January, Chinese banks issued $683.7 billion in new loans. It was a new all-time high. According to People’s Bank of China’s (PBOC), China’s central bank, loans issued in the first month of 2024 “more than quadrupled from the $164.3 billion issued in December.” The issuance of new loans to companies and individuals – well above the $632 billion expected by analysts – is part of the Beijing government’s economic initiatives aimed at boosting domestic demand growth and supporting economic recovery from the covid pandemic.

Moreover, Beijing is trying to revitalize domestic demand amid the ongoing contraction of Chinese foreign trade compromised by the “trade war” launched by the United States. According to an analysis published the other day by Japan’s Nikkei media group, China’s trade with the United States, the European Union, Japan, and South Korea amounted to about $2 billion in 2023, which is 35% of China’s trade with foreign countries.

The alarming predictions on China’s foreign trade were partially confirmed by statistics released by the China Customs Administration, according to which “over the past five years (2019-2023), trade between China and the USA recorded a 2.5% decline.” Over the same period, China’s trade with Japan, South Korea, Germany (China’s main trading partner in Europe), and the UK fell by 1.7% and 1.5%, 0.5% and 0.1% respectively.

According to statistics from the U.S. Department of Commerce, China ranked second after Mexico in exports to the USA in 2023. Meanwhile, an 11% drop in U.S. imports of “smartphones and other electronic products from China” was recorded in 2023 due to U.S. trade restrictions.