According to Chinese Economist Zhao Qingming, growth in new loans in China will probably go down in second half (H2) of 2006.
As per noted Chinese Economist Zhao Qingming, growth in new loans in China will probably go down in second half (H2) of 2006. This will bring the total value of new loans taken in 2006 between 3.1 & 3.3 trillion Yuan ($1 = 7.943 Yuan).
Zhao predicts an increase of about 1.0 trillion Yuan for H2 compared to 2.18 trillion in H1, 2006. Increase in the first half has already met Bank of China's target (2.5 trillion Yuan) of 87 % and the target was achieved in August. This increase in first half, as per Zhao, can also be related to the growth in stock market.
As per RNCOS report China Banking Sector Analysis (2006-2009) demand for loans from Chinese banks is expected to grow by 22 % (CAGR) in 2007 and 18 % in 2008 & 2009. Declining interest rates, demand for credit & housing credit, rise in SME segment and decline in the rate of non-performing loans will be the key factors for growth in banking loans.
Zhao said that the fresh loans should see a comparatively slower growth in H2, 2006, following the same trend as in last 3 years because of macroeconomic steps being taken to stabilize the economy. He has advised the Central Bank to not set targets for loans, as these targets had hardly been met in the last few years.
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