There are three broad factors that explain this negative situation for workers. Firstly, the fall of the Berlin Wall and China’s embrace of the global trading system saw over a billion workers enter the global economy. This greater competition amongst workers depressed wages for most workers around the world.
In view of this, the underlying tone of private banks’ lending remains sluggish. Issuance of corporate bonds and CPs has been steady. Money stock (M2 + CDs) grew slower in June compared with the previous month on a year-on-year basis. In this financial environment, the lending attitude of financial institutions is perceived by firms as less severe, and corporate financing conditions are easing.