(Bloomberg) -- China’s central bank and financial regulators met with bank executives and told lenders again to boost loans to support a recovery, adding to signs of heightened concern from policymakers about the deteriorating economic outlook.

Authorities also urged for adjustments and an optimization of policies for home mortgages at the meeting on Friday, according to a statement from the People’s Bank of China on Sunday, without elaborating on the housing initiatives.

Executives from China Life Insurance Co. and stock exchanges were at the same meeting, where officials also discussed measures with the financial sector to prevent and reduce local government debt risks. 

China has repeatedly urged its banks to increase lending to support the economy. In July, Chinese lenders extended the smallest amount of monthly loans since 2009, a further sign of weak demand in the economy that raises the risk of prolonged deflation pressure. 

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Top leaders last week pledged to expand domestic consumption and support the private sector without detailing any new stimulus measures, the latest in a series of rhetorical attempts to boost confidence as markets sink. But officials have so far resisted rolling out major stimulus efforts, despite a pro-growth tilt signaled by the Communist Party’s Politburo at the end of July. 

The PBOC last week reduced a key interest rate by the most since 2020, a surprise move that came shortly before the release of disappointing data for July showing growth in consumer spending, industrial output and investment sliding across the board and unemployment picking up. 

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Major financial institutions, especially big state-owned banks, must increase loan disbursements and avoid big fluctuations in lending, according to the PBOC’s statement on Sunday. Regulators and financial institutions should coordinate in reducing risks associated with local government debt and strengthen such monitoring, the central bank said. 

China is getting serious about clearing the off-balance sheet debt of local governments. The hidden debt comes mainly from local government financing vehicles, companies that have borrowed on behalf of local authorities and that carry out infrastructure spending on projects like roads and railways. There are no official figures for the size of LGFV debt, although the International Monetary Fund estimates it could be as high as $9 trillion.

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The financial sector should widen its toolkit to prevent and reduce debt risks from LGFVs, and accelerate “risk disposal” in certain regions, the central bank said, without naming the areas.

Officials have signaled concern about the real estate market, where another major property developer now faces a debt crisis and home sales continue to decline. Risks are also spreading to the financial sector, where an affiliate of a major financial conglomerate, which had exposure to the real estate sector, missed payments on some investment products.

(Adds details of meeting from second paragraph)

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