Beijing can still engineer growth on paper — at an ever-increasing cost, according to a report released on Wednesday.
"I don't think people understood the level there was a decision by Beijing, they were going to reverse course on deleveraging and all the progress they made," Leland Miller, chief executive officer of China Beige Book, said in a phone interview."The idea that deleveraging has continued through 2018 and into 2019, that's laughable."
In the months since, the Chinese government has also repeatedly told the large state-owned banks to lend to smaller, privately-run businesses. Those firms contribute to the bulk of economic growth and employment but have traditionally had a more difficult time getting loans than the larger, state-owned corporations, causing many to turn to shadow banking.
However, the cost of that borrowing increased. Every single sector and region of China saw credit costs rise in the first quarter compared with the prior quarter, the report said. The average bank loan rate was up 101 basis points to 6.9 percent, and the average non-bank rate up 426 basis points to 11.42 percent.
Asian age is beginning
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