Abstract: This report studies the current situation of China's banking loan from two aspects: the quantity (loan balance) and the price (loan interest rate) to measure the effectiveness of its supporting the real economy. The report has the following conclusions: first, there are still obstacles in bank loans to serve small, medium-sized and micro enterprises, which on the one hand hinders the development of new economic enterprises in China, and on the other hand, leads to the abnormal financing pattern of Internet enterprises. Secondly, the investment demand for housing will make loans flow to the real estate sector and crowd out the loan funds of the real sector. The strict implementation of "houses are used for living, not for speculation" can benefit the real economy. Thirdly, although COVID-19 has strained the short-term liquidity of enterprises, it has not seriously affected the long-term investment of enterprises. Finally, the interest rate marketization reform helps to improve the efficiency of loan service real economy. LPR reform is an important step in the interest rate market process, and there is a long way to go to improve the loan risk pricing mechanism.

Full report: https://thinktank.phbs.pku.edu.cn/2021/jingjifenxi_0324/21.html