The Chinese government may soon ease its credit policy to support the country’s decelerating economic growth, China’s 21st Century Business Herald newspaper reported on Wednesday.
Credit policy will be relaxed for buying small or mid-sized homes as well as for railway and road projects , the paper said, adding the Chinese government had partially eased some terms of its credit policy for property transactions.
“Some policies will be relaxed slightly. What’s more important is that the authorities will make their stance on the bank lending policy even clearer. It means supporting growth and the real economy,” a source familiar with the situation told the paper.
Recent statistics from China shows lending growing. The country’s financial institutions lent a more-than-expected sum of 793.2 billion yuan [$125.6 billion] in May, a 16.3 percent increase on April.
The People’s Bank of China cut deposit rates on June 7 by 25 basis points to 3.25 percent and lending rates by 25 basis points to 6.31 percent, for the first time since 2008.
The World Bank downgraded in May its forecast on Chinese 2012 GDP growth to 8.2 percent from 8.4 percent with the International Monetary Fund revising its Chinese GDP forecast slightly down to 8.25 percent from nine percent.