China's April bank lending seen plunging from a month ago
Chinese banks are estimated to have issued 700 billion yuan ($96.58 billion) in net new yuan loans last month, less than one fifth of the 3.64 trillion yuan distributed in March, according to the median estimates of 17 economists.
Analysts at Citi Research said new credit could be soft for April, calling it a typically "low season" for loan demand. Although, M1 and M2 supply could improve, they said.
"Growth of monetary base and outstanding credit is set to jump in April with the low base from financial tightening last April kicking in," Citi said.
The data is due to be released from May 10 to 15.
Credit demand has fluctuated in the past few months, as borrowers' confidence tracks pledges made by Chinese policymakers to bolster an economy grappling with a prolonged property crisis, high local government debt and deflationary pressures.
A tit-for-tat tariff dispute with the United States that escalated last month, on top of already cautious household and business spending, curbed the appetite for credit.
China's manufacturing activity contracted at the fastest pace in 16 months in April, after the U.S. tariffs snapped two months of recovery.
Still, China kept a growth target of around 5% this year, having promised more initiatives to support consumption.
Beijing stepped up efforts to cushion the economic damage caused by the trade war with the U.S. this week, announcing a raft of stimulus measures, including interest rate cuts and a major liquidity injection.
The announcements come ahead of a meeting between top U.S. and Chinese economic officials in Switzerland this weekend, seen as an opportunity to begin resolving duties on goods imports between the world's two largest economies that have soared well above 100%.
Broad M2 money supply last month is expected to have grown 7.3%, up from the 7.0% in March.
Outstanding yuan loans probably rose 7.4% in April from a year earlier, the poll showed, matching the 7.4% pace in March.
Total Social Financing (TSF), a broad measure of credit and liquidity, likely grew to 1.22 trillion yuan in April from 5.89 trillion yuan in March, the poll showed. Any acceleration in government bond issuance could help boost growth in TSF.
The measure includes off-balance-sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.
($1 = 7.2478 Chinese yuan renminbi)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
34 minutes ago
- Reuters
Korean equity surge risks stuttering without stronger reform push: Raychaudhuri
HONG KONG, August 4 (Reuters) - The Korean equity market, which went from being among the worst performers in Asia last year to the best regional performer in 2025, stumbled over the past week. The rally has fundamental support, but it could sputter if expected shareholder-friendly reforms don't materialize. The well-known 'Korea discount' afflicting the country's stocks has narrowed considerably this year. Korean equities typically trade at a sharp valuation discount to Asian stocks excluding Japan, with the exception of a brief period of AI-fuelled euphoria in 2023. But this discount fell from around 40% at the peak of political upheaval last year to under 30% in mid-July, thanks largely to expectations of shareholder-friendly reforms and greater clarity around the shape of the new government. However, Korean equities hit a hurdle in late July. The market corrected 4% in the last two trading days of the month after President Lee's government raised the peak corporate tax rate from 24% to 25% and the securities transaction tax from 0.15% to 0.20%. The announcement of a Korea-U.S. trade deal removed some uncertainties, but ambiguities about execution remain, and, overall, disappointment regarding the tax tweak overshadowed the trade truce relief. Korean equity performance in 2025 has been driven not just by political shifts but by several fundamental factors in a few large sectors. Financials, which constitute 13% of Korea's equity market, appreciated by 57% in the year through July 25, benefitting from investors' preference for high dividend yields and expectations of increased loan growth after a stream of rate cuts by the Bank of Korea. Meanwhile, industrials, representing 17% of Korea's market, have been lifted 54% over that period, thanks to the global defence and infrastructure spending boom. Technology, the country's largest sector at almost 30% of the market, has seen share prices rise by 45% in this time. The flagship technology stocks Samsung and SK Hynix are up 24% and 55%, respectively, as they continue to be propelled by AI optimism and the success of some specific new products, most notably Hynix's High Bandwidth Memory chip, an essential input to advanced AI servers and Nvidia's GPUs. Beyond these sector-specific catalysts, one of the most significant trends spurring investor enthusiasm for Korea this year has been the expectation of regulatory changes designed to protect minority shareholders. Korea's 'Value Up' program, initiated in February 2024 by the country's previous government led by former President Yoon Suk Yeol, began to tackle key issues plaguing Korean corporate governance, but many investors believe it did not go far enough. The unaddressed concerns include the prevalence of cross-holding structures that give founding families disproportionate control over companies and, relatedly, companies' reluctance to distribute excess cash to shareholders. Former President Yoon's declaration of martial law in December 2024 and his subsequent impeachment led to presidential elections in June 2025, and the formation of a seemingly stable government under President Lee Jae Myung. Soon after, on July 3, the National Assembly passed, opens new tab a corporate governance reform bill, which, among other things, requires company directors to act in the best interest of shareholders, limits large shareholders' voting rights when appointing audit committee members, mandates that hybrid virtual shareholder meetings must be held by publicly traded firms above a certain size, and raises the required proportion of independent directors on boards from one-quarter to one-third. Even before these measures were taken, corporate behaviour was already changing in anticipation of government pressure. Korean dividend payouts have been rising since 2022, and so have buybacks, according to FactSet. Indeed, buybacks in the first half of 2025 are higher than in all of 2024. These positive changes may have helped spur the rush of foreign capital flows into the country's equity market since April. Foreign institutions sold a net $28 billion of Korean equities from August 2024 to April 2025, and bought back a net $6 billion over the next three months. The currency has also been supportive of inflows. The Korean won has appreciated 7% against the U.S. dollar in 2025, second only to the Taiwanese dollar in the Asian leaderboard. Valuations remain attractive in Korea's market despite the sharp rally. Korean equities trade at a forward price-to-earnings multiple of 12.3x, far lower than its Asian peers that have similar earnings growth profiles. Of course, Korea's PE ratio is based on an 18% earnings growth forecast in 2026, the FactSet consensus expectation, and some investors may be sceptical about this figure. But such scepticism seems unjustified, as Korea's consensus EPS forecasts have been rising since March, a period marked by significant geopolitical and economic uncertainties that are, in many cases, now being resolved. Can the Korean rally regain its momentum? While the market's response to the U.S.-Korea trade deal may not have been overly positive, the outcome – a 15% tariff for many Korean goods versus the 25% rate feared – removes a massive risk, given that 15% of Korean companies' aggregate revenue comes directly from the U.S., according to FactSet. Investors, however, would be well-advised to keep an eye on the country's reform calendar, as several governance-enhancing reforms are still not finalized, most notably a tax amendment to incentivize higher dividend payouts. Moving forward, the fate of the Korean equity rally could depend, to a large extent, on what happens in government. (The views expressed here are those of Manishi Raychaudhuri, the founder and CEO of Emmer Capital Partners Ltd. and the former Head of Asia-Pacific Equity Research at BNP Paribas Securities). Enjoying this column? Check out Reuters Open Interest (ROI),, opens new tab your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI,, opens new tab can help you keep up. Follow ROI on LinkedIn,, opens new tab and X., opens new tab
Reuters
34 minutes ago
- Reuters
China's independent oil firms elbow into Iraq's majors-dominated market
SINGAPORE/BAGHDAD, Aug 4 (Reuters) - China's independent oil companies are ramping up operations in Iraq, investing billions of dollars in OPEC's number two producer even as some global majors have scaled back from a market dominated by Beijing's big state-run firms. Drawn by more lucrative contract arrangements, smaller Chinese producers are on track to double their output in Iraq to 500,000 barrels per day by around 2030, according to estimates by executives at four of the firms, a figure not previously reported. For Baghdad, which is also seeking to lure global giants, the growing presence of the mostly privately run Chinese players marks a shift as Iraq comes under growing pressure to accelerate projects, according to multiple Iraqi energy officials. In recent years, Iraq's oil ministry had pushed back on rising Chinese control over its oilfields. For the smaller Chinese firms, managed by veterans of China's state heavyweights, Iraq is an opportunity to leverage lower costs and faster development of projects that may be too small for Western or Chinese majors. With meagre prospects in China's state-dominated oil and gas industry, the overseas push mirrors a pattern by Chinese firms in other heavy industries to find new markets for productive capacity and expertise. Little-known players including Geo-Jade Petroleum Corp ( opens new tab, United Energy Group ( opens new tab, Zhongman Petroleum and Natural Gas Group ( opens new tab and Anton Oilfield Services Group( opens new tab made a splash last year when they won half of Iraq's exploration licensing rounds. Executives at smaller Chinese producers say Iraq's investment climate has improved as the country becomes more politically stable and Baghdad is keen to attract Chinese as well as Western companies. Iraq wants to boost output by more than half to over 6 million bpd by 2029. China's CNPC alone accounts for more than half of Iraq's current production at massive fields including Haifaya, Rumaila and West Qurna 1. Iraq's shift a year ago to contracts based on profit-sharing from fixed-fee agreements - an attempt to accelerate projects after ExxonMobil and Shell scaled back - helped lure Chinese independents. These smaller firms are nimbler than the big Chinese companies and more risk-tolerant than many companies that might consider investing in the Gulf economy. Chinese companies offer competitive financing, cut costs with cheaper Chinese labour and equipment and are willing to accept lower margins to win long-term contracts, said Ali Abdulameer at state-run Basra Oil Co, which finalises contracts with foreign firms. "They are known for rapid project execution, strict adherence to timelines and a high tolerance for operating in areas with security challenges," he said. "Doing business with the Chinese is much easier and less complicated, compared to Western companies." Smaller Chinese firms can develop an oilfield in Iraq in two to three years, faster than the five to 10 years for Western firms, Chinese executives said. "Chinese independents have much lower management costs compared to Western firms and are also more competitive versus Chinese state-run players," said Dai Xiaoping, CEO of Geo-Jade Petroleum, which has five blocks in Iraq. The independents have driven down the industry cost to drill a development well in a major Iraqi oilfield by about half from a decade ago to between $4 million and $5 million, Dai said. A Geo-Jade-led consortium agreed in May to invest in the South Basra project, which includes ramping up the Tuba field in southern Iraq to 100,000 bpd and building a 200,000-bpd refinery. Geo-Jade, committing $848 million, plans to revive output at the largely mothballed field to 40,000 bpd by around mid-2027, Dai told Reuters. The project also calls for a petrochemical complex and two power stations, requiring a multi-billion-dollar investment, said Dai, a reserve engineer who previously worked overseas with CNPC and Sinopec. Zhenhua Oil, a small state-run firm that partnered with CNPC in a $3 billion deal to develop Ahdab oilfield in 2008, the first major foreign-invested project after Saddam Hussein was toppled in 2003, aims to double its production to 250,000 bpd by 2030, a company official said. Zhongman Petroleum announced in June a plan to spend $481 million on the Middle Euphrates and East Baghdad North blocks won in 2024. Chinese firms' cheaper projects can come at the expense of Iraq's goal to introduce more advanced technologies. Muwafaq Abbas, former crude operations manager at Basra Oil, expressed concern about transparency and technical standards among Chinese firms, which he said have faced criticism for relying heavily on Chinese staff and relegating Iraqis to lower-paid roles. To be sure, some Western firms are returning to Iraq: TotalEnergies announced a $27 billion project in 2023, and BP is expected to spend up to $25 billion to redevelop four Kirkuk fields in the semi-autonomous Kurdish region, Reuters reported.
Reuters
an hour ago
- Reuters
Oil slips after OPEC+ agrees to hike output in September
SINGAPORE, Aug 4 (Reuters) - Oil prices slipped in early Asian trade on Monday after OPEC+ agreed to another large production hike in September. Brent crude futures fell 43 cents, or 0.62%, to $69.24 a barrel by 2218 GMT while U.S. West Texas Intermediate crude was at $66.94 a barrel, down 39 cents, or 0.58%, after both contracts closed about $2 a barrel lower on Friday. OPEC+ agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share, as concerns mount over potential supply disruptions linked to Russia. The move marks a full and early reversal of OPEC+'s largest tranche of output cuts, plus a separate increase in output for the United Arab Emirates amounting to about 2.5 million bpd, or about 2.4% of world demand. In a statement following the meeting, OPEC+ cited a healthy economy and low stocks as reasons behind its decision. "The actual increases since April have been smaller than the headline number and are primarily composed of barrels from Saudi Arabia and the UAE (United Arab Emirates)," RBC Capital Markets analyst Helima Croft said in a note. "The bet that the market could absorb the additional barrels seems to have paid off for the holders of spare capacity this summer, with prices not that far off from pre-tariff Liberation Day levels."
