Beijing Money Shut-Off Reaches a Roar, Real Estate Suffers 银行贷款下降房地产市场受压

By newsdoug on June 14, 2011

China tightens its piggy bank In what should really come as a surprise to no one, newly released data is showing that new lending by Chinese banks tumbled 14 percent percent in May, even as economists were expecting a slight rise, as part of Beijing’s efforts to slow its racing economy and cool the overheated real estate sector. (English article) Regular readers of this blog will note that I previously said the slowdown could be stronger than many were expecting, after E-House (NYSE: EJ), a leading online real estate services firm, earlier this month reported decidedly downbeat Q1 earnings and forecast more gloom in the coming quarters. (previous post) People who follow China know that Beijing has raised interest rates and bank reserve requirements a number of times over the last six months in a bid to slow down lending. But the untold story here is the less apparent behind-the-scenes effect of Beijing’s market-cooling drive, which has seen banks — which take their orders from the central government — slow down many of their lending processes. Anecdotes on the ground abound about people with good credit unable to get loans for new homes or cars due to delaying by banks — a common Chinese government tactic when there’s no good reason for an outright refusal. The upside of all this is that such delays — which have no basis in real economics — can easily be reversed if Beijing starts to worry about too sharp a slowdown. But in the meantime, look for real estate and car sales to continue their rapid slowdown, with volumes and prices likely to decline in the healthy double-digits at least for the next few months. At the same time, look for stagnation or even declines in bank profits as well as their interest income slows.

Bottom line: Beijing is in no hurry to end a sharp drop in bank lending, meaning prices and sales volumes for big-ticket items like cars and homes will continue falling for the next few months.

在中国政府着力给经济和房地产市场降温之际，最新数据表明，5月份银行新贷款减少14%，这一数字也许并没有出乎任何人的预料，虽然曾有经济学家预计贷款会有小幅增加。经常阅读我的博客的读者会记得，我曾经说过，房地产业此番降温力度将超过很多人的预料。此前一家网络房地产服务商易居中国<EJ.N>本月稍早公布惨淡的一季度财报，并预测未来几个季度更不乐观。熟悉中国情况的读者会知道，中国政府在过去的半年里几次加息和提高银行存款准备金率，以收紧信贷。但这造成的一个後果是，连许多信用记录良好的人也没法及时拿到买房子或车子所需的贷款——包括银行暂时推迟放款。无论如何，房地产和汽车销售都将继续快速下滑，而随着利息收入减少，银行业利润也会停滞不前甚至下降。

一句话：中国政府并不急於结束目前的信贷大降局面，这意味着未来几个月，汽车和房屋的价格和销量都将继续下降。