China’s lending tumbled in May and money supply grew at the slowest pace since 2008, adding to signs that the world’s second-biggest economy is cooling.
China has been reining in lending to control inflation and the risk that bad loans will swell after a record expansion in credit that was the nation’s main response to the global financial crisis. Companies pushing up prices have included McDonald’s Corp. (MCD), the world’s biggest restaurant chain.
China’s slower gains in manufacturing and industrial production have prompted “a shift in market worries from overheating to a hard landing,” UBS AG economist Wang Tao said in a May 31 report. While power shortages and de-stocking by companies will trim growth this quarter, the economy is set to expand more than 9 percent this year, according to Wang.