HONG KONG -- Chinese companies are hampering official efforts to revive the economy during the coronavirus pandemic by borrowing from banks and hoarding cash at higher interest rates instead of channeling it into their businesses.
China's central bank over the last two months has cut rates and boosted liquidity to try to spur banks to lend to companies. While the latest data shows that banks have done their part, companies facing an uncertain economic outlook are not using the loans as Beijing would want. Instead many are investing the borrowed money in short-term debt and deposits that, by using derivatives, can yield more than twice the rate of their loan.
