The EIU’s latest financial services report for China, with revised industry forecasts, was published recently. (Link for subscribers; Link to online store for non-subscribers.)

China’s key policy challenge this year and next will be to manage a deceleration in credit growth following the boom in bank lending last year. The rapid expansion in credit fuelled a steep rise in property prices; officials must now carefully deflate this developing bubble. Monetary policy is expected to remain relatively loose, so bank lending will instead be crimped by higher reserve requirements and stricter credit quotas. Still, loan growth is expected to be buoyant this year, with the full-year total approaching US$1trn.