Economics
PBOC Is Trying to Fix China’s Decades-Old Credit Conundrum
- $56 billion credit program tries to alleviate bank stress
- Some economists remain skeptical of effectiveness of approach
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China’s central bank is trying to fix one of the domestic economy’s most intractable problems: Poor access to credit by small companies.
Having resisted the kind of large-scale stimulus rolled out by its global peers, the People’s Bank of China instead has been tapping away at small-scale programs designed to improve the ability of small firms to survive the coronavirus slump. On Monday it announced its latest plan, using 400 billion yuan ($56 billion) to turn unsecured loans to businesses into one-year cash for banks.