China lending down, expect further credit tightening
The drop in new loans was less than expected, but a positive sign as mortgage lending and shadow banking activities were down.
Chinese state media reported Thursday that new loans from Chinese banks in February totaled 1.17 trillion yuan (just under US$170 billion). The number fell far below the near-record 2.03 trillion total in January, but did not go as far as analyst forecasts. Reuters reported increased caution in corporate bond issuance, and a drop in household loans, both signs that bankers are reducing exposure to shadow banking activities. Polls show that the central bank is expected to continue raising short-term interest rates in the coming months.