China Banks Fall on Concern Loan Targets Are a Step Too Far
- One-third of new corporate lending should go to private firms
- ‘There is desperation among regulators,’ a fund manager says
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China’s biggest banks dragged down the stock market on Friday as investors took a dim view of the government’s unprecedented move to tell firms exactly how much they must lend to the country’s struggling private sector.
At least a third of new loans should go to non-state companies, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said late Thursday. Private lending was less than a quarter of banks’ outstanding debt in September.