China SMEI: Early signs of credit easing – Standard Chartered

Lan Shen, Economist at Standard Chartered, point out that their China SME survey shows some positive signs in SME activity in August as the headline SMEI (Bloomberg: SCCNSMEI <Index>) edged up to 56.6 in August from 55.7 in July, mainly thanks to an improvement in the ‘credit’ sub-index, which rose to 52.2 from a record low of 50.4.

Key Quotes         

“The ‘current performance’ and ‘expectation’ sub-indices also edged up 0.4ppt. Manufacturing SMEs outperformed services SMEs.”

“We expect continued policy measures to boost domestic demand and improve credit conditions for SMEs, especially for exporters.”

“Real activity showed a mixed picture in August.”

“Domestic demand picked up and appears set to improve further on policy support, whereas growth in export orders was tepid.”

“Measures to boost SME loans since July seem to be having an effect.”

“Unclogging the monetary policy transmission mechanism and lowering borrowing costs for SMEs remain key to improving financial services for SMEs.”