China regulators tell banks to ramp up lending

China’s central bank has stepped up pressure on lenders with new instructions to grow loans, six bankers with knowledge of the matter said, as the world’s second-biggest economy faces an economic downturn and a plunge in borrowers’ confidence.

The informal message, issued via phone calls over recent months to commercial, rural and even foreign banks, was to lend more money to productive businesses and put less of it in financial investments, the banking sources said.

The calls, which the sources said came from the People’s Bank of China (PBOC) and in one case the China Banking and Insurance Regulatory Commission (CBIRC), are the latest in a series of official efforts to encourage money out of a financial system awash with cash and into lending that can drive real growth.