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A Snapshot of China's Loan Growth 

Joey Wong 

Grassroots℠ Research 


Bank managers surveyed by Grassroots℠ Research expect property developers, manufacturing companies and local government financing vehicles to experience the highest loan growth.
Bank loans and associated credit risks in China have been closely monitored by banking regulators and investors. In March 2013, GrassrootsSM Research interviewed 48 bank branch managers in China for their views on loan pricing, asset quality and the outlook for loan growth.

Highest Loan-Growth Industries in China
Number of sources (n=48) citing expectations for
loan growth in first half of 2013
Grassroots Chart
Source: GrassrootsSM Research report as at March 2013

The findings: Small and medium enterprises (SME) and micro and small enterprises (MSE) loans were expected to grow faster than large corporate loans, mortgages and other consumer loans in the first half of 2013. Bank manager sources expect property developers, manufacturing companies and local government financing vehicles (LGFV) to experience the highest loan growth.

As one source explained, "Small to midsize property developers are still very active… They need large amounts of cash at first. We would love to do business with them, as they can provide high-quality collateral."

Sources reported loan pricing was generally unchanged vs. the second half 2012, and they expect asset quality to improve given more stringent loan application evaluations and higher standards for collateral.

The material contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Forecasts and estimates have certain inherent limitations, and are not intended to be relied upon as advice or interpreted as a recommendation.

Grassroots℠ Research is a division within the Allianz Global Investors group of companies that commissions investigative research for asset management professionals. Research data used to generate Grassroots℠ Research reports are received from reporters and field force investigators who work as independent, third party research providers, supplying research that is paid for by commissions generated by trades executed on behalf of clients.

Allianz Global Investors Distributors LLC, 1633 Broadway, New York NY, 10019-7585,, 1-800-926-4456.


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