Chinese credit growth slowed in the second half of last year, according to new data released Wednesday, but that did little to dent a buildup of debt that has left the nation's financial system increasingly vulnerable.
The People's Bank of China on Wednesday said new credit issued in the Chinese economy fell by 10.7% to 7.135 trillion yuan (about $1.18 trillion) in the second half of 2013 compared with the year-earlier period. But for all of 2013, overall credit rose 9.7% to 17.29 trillion yuan compared with 2012. The central bank's data concerns total social financing, a broad measure of credit in the Chinese economy.
Since the global financial crisis of 2008 and 2009, China's debt levels have grown at a clip similar to the U.S., the euro zone and South Korea before those economies fell into deep recessions. While few economists forecast such an outcome for China, at least in the near term, the country's debt accumulation could eventually slow growth, as occurred in Japan during the 1990s.
Powering China's climbing debt is lending by what are known as shadow bankers--an assortment of trust companies, securities firms, insurance companies and other informal lenders. Many of the loans from such institutions go to borrowers that traditional banks deem too risky. That can include local governments, real-estate developers and corporate borrowers in industries plagued by overcapacity.
In 2013, lending by shadow banking institutions rose 43% on year to 5.165 trillion, the central bank reported. It doubled to 2.865 trillion in first half of the year compared with the same period in 2012 but fell 5.1% in the second half.
Economists said the second-half credit slowdown was due in part to the government pushing up interest rates, which reduced demand. Also, the year-ago period was a time of a big expansion in credit, as the government looked to make sure growth topped its 7.5% target for the year.
Still, they said, new credit in the second half of 2013 wasn't that much lower than the year before. 'The government is trying to get a handle on credit flows, but the overall leverage still seems high,' said Nomura analyst Zhiwei Zhang.
The central bank plans to step up supervision of shadow banking, Sheng Songcheng, head of the central bank's statistics department, said at a news briefing Wednesday. The PBOC would encourage such institutions to channel their loans to borrowers pursuing projects that would boost economic growth. 'We should see [shadow banking's] positive roles and risks in them at the same time,' he said.
Clamping down too hard on credit risks undermining growth, as projects go begging for cash. Royal Bank of Scotland analyst Louis Kuijs estimated that China is still adding to its total domestic credit at a pace that is roughly twice the rate of growth of GDP, and that Beijing would move slowly to decelerate. 'Even though the government is trying to move toward a slowdown, we're only at the beginning,' he said.
Beijing has had some success in limiting growth of loans made by trust companies, which have been the most important platform of the shadow banking system since 2009. However, even as Beijing cracks down in one area, other sources of shadow credit have ballooned, filling the gaps caused by any funding shortfall.
Entrusted loans, whereby companies lend directly to one another, accounted for 14.8% of total social financing in 2013, the second largest category of new credit behind banks loans. In 2012, it represented only 8.1%. In the second half of 2013 entrusted loans represented more than 20% of all new credit created during the period, or 1.4 trillion yuan.
Entrusted loans allow companies that have spare cash to earn a higher return than if they park it in a bank as deposits or buy bonds, although it exposes them to significantly more risk. Still, the returns can be exceptionally high. Property developers and local government-backed infrastructure companies, which can't readily tap bank credit, are willing to pay high interest rates to anyone willing to lend.
在经济项目急需资金的情况下，对信贷控制过紧就有可能会阻碍经济增长。苏格兰皇家银行(Royal Bank of Scotland)分析师高路易(Louis Kuijs)估计，中国国内信贷投放总量仍在以国内生产总值(GDP)增长率两倍的速度增长，中国政府将逐步采取措施来降低信贷投放速度。他说，即使政府正着手降低信贷增速，也只是刚刚开始。