Chinese corporate borrowing growth slumped in the third quarter, according to China Beige Book International, which expects policymakers to shy away from rolling out any major stimulus to boost credit.

A new China Beige Book survey found that borrowing among Chinese companies in the July-to-September period was the second lowest in data going back to 2012. The poll was based on feedback from more than 4,000 local firms.

Corporate borrowing “stands out in one significant way: there is just so little of it, at least compared to the pre-Covid era,” the company’s analysts wrote in a report published this week.

The survey results echo official credit data from China released last week, which showed relative weakness in corporate borrowing as demand remains under pressure — a sign of fragility for the economic recovery. Data expected later this week will present a fuller picture of activity through the third quarter, including September figures for industrial output, unemployment and retail sales.

The China Beige Book analysts noted the People’s Bank of China has been rolling out monetary easing this year, though the impact on credit has been limited.

“Every sector we track is also borrowing more cheaply than a year ago,” the analysts wrote, adding that if the Communist Party “truly wished to do more, it presumably would’ve done so already. From a monetary policy standpoint, this may be as good as it gets.”

The borrowing slump may be an intended result of policy, they said, pointing to improvements in manufacturing and services while “disfavored” property and commodities slid.

Manufacturing was a particular bright spot, as output, hiring and prices improved more rapidly in the third quarter than the second, the survey found. “Manufacturing is not booming, but it is certainly not struggling,” the analysts wrote, adding that the sector’s performance in the fourth quarter would be decisive and may pressure growth if activity softens in the final months of 2023.

Retail companies in the survey saw revenue, profits and outlet expansion better in the third quarter than in 2022, but stalled versus the second quarter.

“It is possible that demand is picking up, as sales prices were stronger,” the analysts wrote. “But only a bit, which is all that should be expected from consumption – a bit more.”