China
New credit rises to record
China’s new credit rose to a record last month, supporting growth in the world’s second-biggest economy while underscoring risks to the financial system from defaults and bad loans. Aggregate financing, the broadest measure of credit, was 2.58 trillion yuan (R4.61 trillion), the People’s Bank of China said yesterday. New local currency lending was 1.32 trillion yuan, the highest level since 2010. Trust loans, under scrutiny because of default risks, were about half the level of a year earlier. The data add to better-than-forecast trade numbers in suggesting that China can limit the scale of any slowdown from last year’s 7.7 percent expansion in gross domestic product. At the same time, the figures contrast with a central bank call last month for lenders to control surging loans and highlight diminishing economic returns from credit growth. “Banks are still extending a lot of credit and this will somewhat cool down fears that China is slowing dramatically,” said Liu Li-Gang, the head of Greater China economics at Australia & New Zealand Banking Group in Hong Kong. – Bloomberg
World
Toyota recalls 295 000 cars
Toyota Motor is recalling about 295 000 Lexus and Toyota brand vehicles globally, mostly in the US, because various safety systems including stability control and anti-lock brakes could become inoperative. It is recalling vehicles from model years 2012 and 2013 because an electrical component in the brake actuator, which adjusts fluid pressure in each wheel cylinder, may experience increased resistance, according to documents filed with the US National Highway Traffic Safety Administration. That could lead to reduced vehicle control and an increased risk of a crash as various safety systems, including traction control, become inoperative. There had been no reports of accidents or injuries related to the issue, said a Toyota spokesman. Of the total recalled, 261 114 were sold in the US. The rest were exported to other markets, the company said. – Reuters