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Finance

Chinese borrowing plunges as businesses, homebuyers stay on sidelines

Longer-term lending falls 40% in May in an uncertain economy

Speculation has emerged that the People's Bank of China will cut interest rates again to spark demand for longer-term funding.   © Reuters

BEIJING -- A key indicator of private-sector appetite for funding in China is down as businesses and consumers remain hesitant to make big investments in an economy disrupted by COVID-19 lockdowns.

New loans in China carrying a term of one year or longer plunged by 40% in May, falling for the 12th straight month. Longer-term borrowing typically funds home purchases and business investment in equipment, which boosts economic growth.

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