China’s latest financial data paints a bleak economic outlook amid trade war with US

China’s financial condition weakened in October, pointing to a further deceleration in the world’s second-biggest economy amid the trade war with the United States.

While Beijing has been pressing the country’s banks to boost lending to the “real economy”, newly granted loans nearly halved to 677 billion yuan (US$97.32 billion) in October, from 1.38 trillion yuan (US$198.39 billion) in September, according to data released by the People’s Bank of China on Tuesday.

While October is a seasonally weaker month for Chinese credit data, the fall was sharper than all economists’ estimates.

Total social financing, a broad measure of various forms of credit support to economic growth such as loans, bonds and trust investments, shrank to 728.8 billion yuan in October, or just a third of the 2.17 trillion yuan of September, the central bank data showed.

It also marked the lowest reading since January 2017, the first month for which comparable data was available.