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ASR’s Adam Wolfe on Bloomberg: China Central Bank Hints It Will Dial Back Pandemic Stimulus

Beth McCann

21st APR. 2023

The PBOC signaled it may start scaling back some of the stimulus measures implemented during the pandemic as the economy begins recovering and credit demand picks up.

Adam Wolfe noted that, “Back in the fourth quarter of 2022, structural tools supported a third of the net increase in total lending….”

Adam continued, “the programs were critical to maintaining credit growth, which stagnated last year as the economy slowed dramatically.”

Weak demand for credit from the non-financial sector was the main reason the PBoC relied so heavily on structural tools last year. Adam estimated that the PBoC’s structural tools supported 26% of the net increase in new bank loans in Q3, for example. 

In his research, Adam anticipated that the PBoC would have to pare back its usage of these tools if credit demand recovered, which is what seems to be happening now.

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