China Extends Credit Worldwide While U.S. Banks Freeze It
April 10, 2017 (EIRNS)—In a strong demonstration that China’s Belt and Road Initiative ("New Silk Road") is a huge source of constructive credit for many nations, China’s four largest state banks have reported their lending for 2016 as a whole. According to analysis in the April 10 Wall Street Journal, three of the four reported much larger increases in loans issued outside China than within—although their domestic loans were also rising substantially. This was "helped by state-backed ambitions to build infrastructure around the world," the Journal reported.
Bank of China, for example, the fourth-largest but most international lender, increased its overseas credit issuance by $30 billion-equivalent to $246 billion. Its domestic business loans rose by about $15 billion.
wrote the Journal.
Industrial & Commercial bank of China Ltd. and China Construction Bank Corp. each reported increases of about $20 billion from 2015 to 2016 in lending along the Belt and Road and in Africa and Ibero-America. Thus, overseas project lending jumped by about $70 billion—by more than 30%—in the year for those three banks, while they also strongly increased domestic lending. The fourth big state bank, Agricultural Bank of China, remained focused on the domestic economy.
By contrast, the Journal also reported, April 7, that there had been no growth in commercial and industrial loans by the U.S. banking system from last Sept. 7 to the week ended March 31. It was the first period of six months or more of zero or negative lending growth, since the 2008-2011 collapse period after the crash.
This commercial/industrial zero growth came as part of the sharp drop in the overall rate of lending growth—including lending for securities purposes, etc.—from about 5% to 2% annual rate. It is part of a debt crisis developing in the U.S. economy, where the debt of non-financial companies has gone through a spectacular 5-year, 60% rise, with declining profits and now declining credit available to the housing, commercial real estatle, auto, and oil/gas bubbles.