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Chinese banks inflating loan numbers amid struggle to meet govt demands

Some state-owned Chinese banks are extending loans to companies and then allowing them to deposit funds at the same interest rate

China economy
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Photo: Bloomberg

Bloomberg
Chinese banks are employing unusual practices to inflate their loan volumes as they struggle to meet government demands to pump more credit into an economy beset by Covid lockdowns and a beleaguered property market.
 
With borrowers reluctant to take on debt as economic growth slows, some state-owned banks are extending loans to companies and then allowing them to deposit funds at the same interest rate, according to executives at six banks who spoke to Bloomberg News on condition of anonymity. Others are borrowing from each other through short-term financing arrangements that can be dressed up as new loans to boost

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