>> ASIAONE / NEWS / LATEST NEWS / ASIA / STORY
China's credit supply may top govt targets
Tue, Nov 30, 2010
China Daily/Asia News Network

BEIJING - China's new loans in November may top 500 billion yuan (S$98.75 billion), sparking speculation among analysts that the whole-year credit supply may exceed the central government's target of 7.5 trillion yuan.

"The total credit supply for 2010 is likely to reach 8 trillion, exceeding the government target by 6.7 per cent, said Liu Yuanchun, deputy director of Renmin University's School of Economics.

New loans stood at 588 billion yuan in October, far higher than market expectation, bringing the total credit in the first 10 months of this year to 6.88 trillion yuan - 600 billion yuan lower than the government's loan target for this year.

Credit demand remains vigorous and new-loan growth may well exceed 7.5 trillion yuan next year if the policymakers do not adopt tough measures to contain growth, China Securities said in a report.

Taming fast-rising inflation has been a top priority for the central bank, after it accelerated to 4.4 per cent in October, the fastest pace for two years.

M2, the broadest measure of money supply, also rose 19.3 per cent in October from a year earlier.

Hu Xiaolian, deputy governor of the People's Bank of China, said last week that the monetary authority is facing a challenge to keep new loans within the target range it set at the beginning of the year, after lending expansion rebounded in recent months because of robust credit demand.

Hu said the central bank will make full use of its policy tools, including the reserve requirement ratio and interest rate, to steer money and lending growth back to normal levels.

The central bank last month raised interest rates for the first time since 2007, and twice told banks to set aside more deposits as reserves, to limit their capacity to lend.

UBS Securities said in a report that Beijing will likely take more measures to curb inflation and strengthen liquidity management, including accelerating the pace of yuan appreciation, issuing more central bank bills, and further raising the deposit reserve ratios and interest rates.

Some analysts said that Beijing's monetary policy will continue to tighten in 2011, and it's estimated that new- loan growth will be lower than this year's target, at between 6 trillion yuan and 7 trillion yuan.

"There will be a steady growth in lending for the entire banking industry in 2011," said Li Lihui, president of Bank of China, adding that the banking industry is expected to see stable growth throughout next year.

-- China Daily/Asia News Network

 
 
STORY INDEX
 
  Talks are only way to avoid Korea war: Chinese state media
   
 
  Pakistan suicide attack kills four: officials
   
 
  China's credit supply may top govt targets
   
 
  Cathay flight makes emergency landing in Kazakhstan
   
 
  Youth held for nuisance on Facebook
   
 
  Deep quake hits Japan islands
   
 
  Illegally-constructed courtyard houses are likely to be razed soon
   
 
  'Kim still drinks alchohol' after stroke: report
   
 
  Taiwan home prices to rise in 5 municipalities
   
 
  North Korea details expanded nuclear programme
   
>> RELATED STORY
China 'ready to abandon North Korea': leaked US document
China doubtful of N.Korea as ally - US cables
Man stole for sick girlfriend and married her while in prison
Most Chinese blame US for Korea tensions: state media poll
Excessive drugs given to livestock in China

Elsewhere in AsiaOne...

Investor Relations: Four Singapore firms invest $127m in Tianjin

Wine,Dine&Unwind: Finding oneself in the shadow of a monk

Health: Chinese government searches for batch of tainted drinks

Motoring: GM first foreign carmaker to sell two million units in China

Digital: Netizens vent anger over Google

Business: Illegally-constructed courtyard houses are likely to be razed soon

Just Women: Vagrant goes from beggar to prince

Multimedia: Beijing smog watch: 18 August