Standard Chartered analysts suggest that their China’s August SME survey showed early signs of stabilisation in economy.
“The headline SMEI (Bloomberg: SCCNSMEI
“Both the ‘current performance’ and the ‘expectations’ sub-indices edged higher versus July, though they remained relatively low.”
“SMEs’ expectations of real activity turned benign, pointing to a possible mild recovery later this year.”
“SMEs’ credit conditions remain a concern, with the ‘credit’ sub-index easing in August after improving in July.”
“The recent loan prime rate (LPR) reform, making it the new reference rate for loans, should improve interest rate transmission. However, to consistently lower financing costs for SMEs, we think the authorities will need to offer cheaper funding to the banking system.”