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China urges banks to boost loans to support economic recovery


China’s central bank and financial regulators have met with banking executives, urging them to increase loans to support economic recovery amidst growing apprehensions about the country’s economic future. This directive follows an unexpected rate cut by the People’s Bank of China, the most significant since 2020, in response to a declining property market and weak consumer spending. July’s economic data showcased a slide in consumer spending, industrial output, and investment, with unemployment rates on the rise. Adding to the concerns, Chinese banks recorded the lowest monthly loans since 2009 in July, indicating weak economic demand and potential deflationary pressures. The central bank emphasised on risk management related to local government debt and reiterated its commitment to optimise home mortgage policies amid looming concerns in the real estate sector.

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