Weaker credit supply predicted

Credit supply in August is set to weaken further as the de-leveraging process in the financial sector continues, economists said.

"Newly added credit in August may stand at 650 billion yuan ($106 billion), down from 699 billion yuan new loans recorded in July," said Lu Zhengwei, chief economist with Industrial Bank Co.

E Yongjian, a financial analyst with Bank of Communications, also predicted that new loans will decline in August.

"Second-half credit supply usually accounted for only 40 percent of the year's total, therefore a slowdown in the third quarter would be normal."

In the meantime, analysts said growth in non-bank loan financing would also decelerate.

"Trust loans and corporate bonds remained at low ebb, and that may also be the case for August," Lu said.