【招银国际】China Economy: Credit weakness awaiting policy support-250616（7页）.pdf

1、 PLEASE READ THE ANALYST CERTIFICATION AND IMPORTANT DISCLOSURES ON LAST PAGE MORE REPORTS FROM BLOOMBERG:RESP CMBR OR http:/.hk 1 MN 16 Jun 2025 CMB International Global Markets|Macro Research|Economic Perspectives China Economy Credit weakness awaiting policy support Chinas credit market continued

2、 to be driven by government-led borrowing,while the private sector demand continued to lag.Outstanding social financing continued to recover in May,as government bond issuance ran faster than the average pace for the debt quota over the year.Meanwhile,the new RMB loans continued to dip,as tariff sho

3、cks hurt consumer demand and business capex through the confidence channel.China has to launch additional policy support to revive the recovery momentum especially in the private sector.In 2H25,we expect a further 10 bps LPR cut,along with a possibly moderate increase in the broad fiscal deficit.The

4、 central bank is likely to maintain ample liquidity,support steady credit growth,and facilitate a recovery in the property sector to cushion the economic impact of tariff shocks.If a trade deal with the US can be reached,China might focus on economy rebalancing with stronger fiscal expansion,additio

5、nal consumption stimulus and faster overcapacity reduction.Social financing flows moderated as tariff shocks dampened confidence and credit demand.Outstanding social financing(SF)stayed flat at 8.7%in May(all in YoY terms unless otherwise specified),while the SF flow expanded by RMB2.29trn,stronger

6、than market expectation at RMB2.05trn.Government bond issuance remained the major driver,rising 19.3%to RMB1.46trn in May compared to RMB972bn in Apr.The issuance pace was 9%ahead of the average pace to meet the full-year target of RMB13.9trn incremental debt quota,indicating that there will be eith