Lending slump not a concern for policymakers

Editor's Note: New yuan-denominated loans and total social financing plunged unexpectedly in July, but economists said investors should not panic over the credit contraction, which indicated that the central bank will maintain a stable monetary policy rather than tightening or easing too much. The People's Bank of China announced last Wednesday that new local currency loans totaled 385.2 billion yuan ($62.6 billion) in July, much weaker than the widely expected figure of more than 700 billion yuan. Total social financing, a broad measure of overall credit supply, dropped 546 billion yuan year-on-year to 273.1 billion yuan.

Zhu Haibin, chief China economist at JPMorgan Chase & Co

In June, credit data were much stronger than market expectations, which sparked market speculation on the possibility of further monetary easing. The credit data in July sent a clear signal that monetary policy will remain stable.