The Joplin Globe, Joplin, MO

Business

June 11, 2012

Chinese banks issue more loans to stabilize growth

BEIJING — Chinese banks picked up the pace of lending in May in an effort to stabilize the world’s second-largest economy as it faces growing fears about a sharp slowdown.

Lending institutions exceeded many analysts’ expectations by issuing a robust $124.5 billion in new loans last month, up from $107 billion in April, China’s central bank said Monday.

The news sent stock markets up across Asia as investors looked for signs that China’s government would turn to monetary easing to support growth.

“The rebound of new lending in May sends a positive message that Beijing’s recent easing efforts are starting to work,” said economists at HSBC in a research report Monday. “That said, this momentum needs to be strengthened in the coming months if China’s ongoing slowdown is to be reversed.”

Inflation grew at its slowest pace in two years last month at 3.0 percent, giving policymakers more room to boost lending.

The lending data comes a day after China also reported larger-than-expected growth in trade. Chinese exports grew to a seven-month high of 15.3 percent in May from a year ago compared with 4.9 percent year-on-year growth in April. Imports also surged 12.7 percent in May from a year ago - a stark reversal from the 0.3 percent recorded in April.

Brighter numbers for industrial activity, retail sales and fixed-asset investment released over the weekend has also raised some optimism that China’s economy may have bottomed for the current cycle.

“These signs of stabilization are certainly welcome, but it’s too early to pop the champagne,” wrote Beijing-based analysts at GaveKal Dragonomics, an economic research firm. “China’s growth this year will not be disastrous, but it probably will be disappointing. Current momentum still looks weak and below potential, and the drag on exports from the problems in Europe is unlikely to quickly abate.

“As more pro-growth policies kick in, China’s economy should stabilize and pick up in (the second half of the year). But the stimulus is still relatively cautious, so a sharp rebound is not likely.”

 

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Poll

In an effort to curb prostitution, St. Louis police are targeting, and perhaps humiliating, the "johns" who use the services. Postcards mailed to the homes of those charged with trying to pick up prostitutes will offer a reminder about spreading sexually transmitted diseases, along with listing the court date. Do you think this is a good approach?

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