China: Credit easing kicks in – Standard Chartered
|Lan Shen, economist at Standard Chartered, points out that the China’s January SMEI reading shows a marginal improvement in SMEs’ business performance entering 2019.
Key Quotes
“The headline SMEI (Bloomberg: SCCNSMEI <Index>) – based on our monthly survey of more than 500 SMEs – edged up to 54.9 in January from 54.7 in December.”
“The ‘current performance’ sub-index advanced 0.4ppt from December and was 1.0ppt higher than in January 2018. The ‘credit’ sub-index picked up 1.2ppt from December and was 1.5ppt higher than January last year. This suggests a brighter start to this year compared to 2018, supported by improved credit support.”
“We expect the relaxation of criteria for banks’ eligibility for targeted RRR cuts, the targeted medium-term lending facility (TMLF) and the recent RRR cut to incentivise banks to increase credit allocation to SMEs and lower their funding costs.”
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