Slow loan growth in China has been introduced as the new normal by Peng Yongfu, the head of the country's central bank. He emphasized that this situation has increasingly become part of China's economic realities and requires attention and adaptation from economic policymakers.
Impact on the National Economy
Peng stated at a press conference that loan growth in China decreased to 9.4 percent in the third quarter of this year, while this figure was 12.4 percent last year. This decline clearly indicates a reduction in domestic demand and the challenges present in China's housing market. The People's Bank of China has concluded that new measures and changes in financial policies are needed to strengthen economic growth.
Read more: Severe decline in Sydney housing created a significant shortfall in state tax revenues
Consequences for Financial Markets
Slow loan growth could impact global financial markets. Investors should anticipate changes in interest rates and monetary policies from the People's Bank of China. These changes could also affect the yuan exchange rate and global stock markets. Additionally, economists believe that a reduction in loans may indicate a decrease in economic activities and consequently, a decline in China's exports.
As a result, these developments could impact countries dependent on trade with China and also affect the prices of goods and raw materials in global markets. In this context, the People's Bank of China may need to implement more accommodative policies to support economic growth.
Given these conditions, analysts believe that China is entering a new economic phase where sustainable and balanced growth, rather than rapid and uncontrolled growth, will be the primary goal. This shift in approach could lead to greater stability in global financial and economic markets.
Read more: Boeing and South Korean Airlines finalize an order for 103 aircraft · Bank of Japan raises interest rates to the highest level in 31 years
