SHANGHAI, March 13 Thu Mar 13, 2014 11:11am EDT
(Reuters) - Growing jitters about the financial health of bloated industries in China have prompted many banks to cut lending in these sectors [steel, cement, aluminium smelting, flat-glass and shipbuilding] by as much as 20 percent, banking and industry sources with knowledge of the matter said.
It sounds disturbingly close to a credit crunch, doesn't it? Now read this excerpt from the most recent report of the People's Bank of China, the country's central bank:
At end-February, outstanding RMB and foreign currency loans registered 78.90 trillion yuan, up 13.9 percent year-on-year. Outstanding RMB loans grew by 14.2 percent year-on-year
If a double-digit lending growth slows down too quickly, a recession is very likely to occur.