While conventional sectors continue to struggle with a downturn, high-tech enterprises are pursuing expansion, frequently through direct financing channels.
China’s persistent efforts to revitalize its domestic economy are still encountering obstacles, as the latest lending data indicates ongoing weak consumption and subdued investment nationwide. The technology sector stands out as a rare bright spot amid the central government’s drive for innovation aimed at decreasing dependence on foreign sources.
New bank loans totaled 520 billion yuan (US$77 billion) in May, based on People’s Bank of China data released on Friday. This figure fell short of the 620 billion yuan recorded in the same month last year, highlighting a clear underperformance in both corporate and household lending, the two primary categories.
A chief economist at a domestic securities firm, who spoke on condition of anonymity, stated that “over the past two years, financial regulators have introduced various measures to boost household demand, including interest rate reductions, consumption loan interest subsidies, and others”.
Nevertheless, “these initiatives have produced limited effects in both the housing market and consumer spending”, the source argued.
In its report, CICC noted that “household deleveraging and weak consumption have reduced companies’ willingness to borrow and invest, especially in traditional industries”.
“Combined with uncertainties arising from overseas geopolitical tensions, manufacturing investment has weakened notably since March,” the analysts wrote. “The economic recovery remains under structural pressure, and we expect this situation to continue throughout the year.”