Chinese Regulatory Bodies to Aid Banks in Increasing Credit for Consumer Industry

China's financial regulator said on July 26 that it will advise banks on how to increase credit in the consumer service industry, as authorities seek to boost the country's flagging post-pandemic economic recovery.

"Residents' consumption capacity is insufficient, and their willingness to spend is low; consumption of big-ticket items is low," a National Financial Regulatory Administration official said in a briefing.

According to the official, the foundations of the recovery of consumption activities are not particularly strong, and structural problems persist.

The remarks came after China pledged earlier this month to improve the private sector economy, and the country's state planner also unveiled measures to encourage private investment in infrastructure sectors.

According to the financial regulator, financial institutions are encouraged to increase credit support for firms in service industries such as wholesale and retail, lodging, catering, and cultural tourism.

According to the regulator, the Chinese banking sector's bad loan ratio was 1.68 percent at the end of June, a 0.08 percentage point decrease year on year.

At the end of June, the banking sector's outstanding non-performing loans totaled 4 trillion yuan ($560.09 billion).