According to a recent Reuters poll, new bank loans are expected to have declined in December but 2019 still looks set for record lending activities. PBOC’s monetary policy easing and liquidity boosting measures are expected to have spurred lending in China.

Overall new yuan loans in December were expected to have declined to 1.1294 trillion from 1.39 trillion yuan in the previous month. This still brings total new lending in 2019 to 16.88 trillion yuan, the highest on record and 4.3% higher than the previous highest figure of 16.17 trillion yuan back in 2018.

Since early 2018, the PBOC has cut banks’ RRR eight times in a bid to boost liquidity and encourage spending, especially among small and medium businesses to offset a slowdown in economic growth. These measures have been undertaken to compensate for the decline in GDP driven by the prolonged trade war with the US which has hit Chinese exports hard.

According to sources, China is expected to maintain its inflation target around 3% in 2020, steady from last year. Meanwhile, economic growth targets have been revised lower to around 6% this year from 6.6.5% in 2019.