How Much Has Private Credit Lending Reacted to Monetary Policy in China? The Case of Wenzhou

Duo Qin, Zhong Xu and Xue-Chun Zhang
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Zhong Xu: People's Bank of China
Xue-Chun Zhang: People's Bank of China

No 178, Working Papers from Department of Economics, SOAS University of London, UK

Abstract: This study investigates empirically what the major factors are which have driven Wenzhou’s informal credit market and how much that market is responsive to monetary policies and the formal banking conditions nationwide. The main findings are: (i) the informal credit lending rates are highly receptive to monetary policies; (ii) the market is dominantly demand driven; (iii) the informal lending is substitutive to bank savings in the short run but complementary to banking lending in the long run; and (iv) the market is complementary to excessive investments in the local real estate market.

Keywords: informal credit market; monetary policy (search for similar items in EconPapers)
JEL-codes: E52 G19 O16 (search for similar items in EconPapers)
Pages: 23
Date: 2013-02
New Economics Papers: this item is included in nep-cba, nep-iue, nep-mon and nep-tra
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:soa:wpaper:178

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