China's banks granted new loans at a record level at the beginning of the year. The Chinese economy is struggling with sharply falling prices and a worsening real estate crisis.
The banks counter this with generous lending. In order to support the economy, the central bank recently reduced the reserve ratio for commercial banks by half a percentage point. This released around one trillion yuan (the equivalent of around 128 billion euros) in liquidity for the financial system. The economic leaders in Beijing have announced that they will continue to supportThe central bank wants to use a flexible line to stimulate domestic demand.