China Center Data Flash: Tight credit is suffocating real estate
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Outstanding credit growth slowed to 15.9 percent year over year in April, the lowest point since December 2005. We have been highlighting how credit-dependent China’s economy has become over the past several years, but this point can’t be stressed enough – China’s economic growth will not stabilize if credit growth continues to slow. In many respects, the continued across-the-board economic weakness in the April data flows from the ongoing tightening of credit conditions and (paradoxically) the more recent fall off in credit demand.