China's central bank asks major lenders to curtail credit growth this year

China’s central bank asked the nation’s major lenders to curtail loan growth for the rest of this year after a surge in the first two months stoked bubble risks, according to people familiar with the matter. At a meeting with the People’s Bank of China on March 22, banks were told to keep new advances in 2021 at roughly the same level as last year, said the people, asking not to be identified as the matter is private. Some foreign banks were also urged to rein in additional lending through so-called window guidance recently after ramping up their balance sheets in 2020, one of the people said. The comments give further detail to what the central bank stated publicly after the meeting, when it said it asked representatives of 24 major banks to keep loan growth stable and reasonable.

In 2020, banks doled out a record 19.6 trillion yuan ($3 trillion) of credit, with about a fifth directed to inclusive financing such as small business loans. Lending the same amount this year would bring the outstanding balance to about 192 trillion yuan, an annual increase of about 11 per cent, the slowest pace in more than 15 years.

China threatens Taiwan with regular drills A Chinese carrier group is exercising near Taiwan and such drills will bec­ome regular, China’s navy said in a further escalati­on of tensions near the island. Taiwan has complained of an increase in Chinese military activity near it in recent months, as China steps up efforts to assert its soverei­gnty over the democratically run island. China’s navy said the carrier group, lead by the Liaoning, the country’s first aircraft carrier put into active service, was carrying out “routine” drills in the waters near Taiwan. The aim is to “enhance its capability to safeguard national sovereignty, safety and development interests”, it added.