20230814-招银国际-New_loans_slumped_as_capex_demand_weakened_8页_679kb

报告摘要

China's economy weakened in July 2023, marked by declining new loans, deteriorating housing sales, and deflationary pressures. Capex demand and credit appetite for households and private businesses remained low, contributing to reduced economic activity.

New Loans:
- Total new yuan loans to the real sector plunged 91.1% YoY in July after rising 15% in 1H23.
- Household new loans turned negative at RMB 200.7bn, driven by high outstanding mortgage rates and low financial confidence. Short-term household loans reached RMB 133.5bn, while medium-to-long-term loans were negative at RMB 67.2bn due to mortgage repayments.
- Corporate new loans dropped 17.3% YoY, with short-term loans turning negative at RMB 378.5bn and medium-to-long-term loans decreasing 21.6%.
Social Financing and Other Indicators:
- Social financing flow slumped, with a YoY drop of 32.2% in July after an 18.7% decrease in June.
- Corporate bond financing rebounded +22.8% YoY, while government bond financing picked up 2.8% YoY as local governments accelerated issuance.
- M1 growth slowed, and other indicators like bill financing and A-share market performance showed weak demand.

CPI growth turned negative, signaling deflation risks. Housing sales continued to decline, and exports deteriorated, exacerbating the slowdown.

Policymakers may loosen credit supply through RRR cuts, deposit rate reductions, and LPR cuts to boost growth.
Property policies could ease with lower down-payment ratios and mortgage rates for first-home and second-home buyers.
Increased support for hard-technology and high-end manufacturing sectors is recommended to stimulate economic activity.