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Chinese banks extend bigger loans
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Chinese banks lent more than expected in November due to higher corporate demand while the growth of money supply slowed month on month as the central bank sought to control liquidity distribution.
New yuan loans totaled 624.6 billion yuan (US$103 billion) last month, up 102.6 billion yuan from a year earlier and above October’s 506.1 billion yuan, the People’s Bank of China said in a statement yesterday.
The figure was also higher than the forecast of 590 billion yuan compiled by Reuters.
Credit demand remained robust in November because higher economic growth in the third quarter and the key plenum of the Communist Party of China boosted confidence, Lu Ting, Zhi Xiaojia and Robbie Li, China economists with Bank of America Merrill Lynch, said in a research note.
The analysts also cited improving external demand, evidenced by the better-than-expected export growth for November.
Meanwhile, November’s total social financing — the broadest measure of credit supply, including loans, bank acceptance bills, corporate bonds and equity financing — rose by 105.3 billion yuan from a year ago to 1.23 trillion yuan, reversing an annual drop in October.
M2, the broader measure of money supply, jumped 14.2 percent last month year on year, 0.3 percentage points faster than that a year earlier but down 0.1 percentage point from October.
“Seeing that the growth in the trade surplus hit a record in November, the central bank has made big efforts in controlling the liquidity supply,” said Zhang Wengang, an analyst with Nanjing Securities.
The economic indicators released this week revealed a mixed picture with retail sales accelerating, exports beating forecast but industrial output and imports rising less than estimated. The Consumer Price Index grew 3 percent year on year in November, down from 3.2 percent in October.
“With a muted inflation and a pace of GDP growth in line with China’s potential, we expect the government to maintain neutral monetary and fiscal policies for the next couple of quarters,” said economists from Bank of America Merrill Lynch.
A high-level economic meeting is being held in Beijing this week that will set next year’s policy tone, including the widely-watched growth target.
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