Chinese banks ramped up lending at the end of last year, official data showed yesterday, after Beijing relaxed credit restrictions and ordered banks to boost support for small businesses.
China’s state-owned lenders issued 640.5 billion yuan (US$101.5 billion) in new loans last month, compared with 562.2 billion yuan in November, the People’s Bank of China said in a statement.
The late surge in lending takes the total value of new loans issued last year to 7.47 trillion yuan, the central bank said.
The full-year figure was below the 7.95 trillion yuan in 2010 as Beijing hiked interest rates and increased the amount of money banks must keep in reserve as it battled to rein in inflation and soaring property prices.
The broadest measure of money supply, M2, rose 13.6 percent year-on-year last month, accelerating from 12.7 percent in November.
The value of new loans beat analysts’ expectations for 580 billion yuan, according to a Dow Jones Newswires forecast, and came after policymakers in November cut the amount of money banks must keep in reserve.
Authorities have also ordered banks to boost lending to small businesses, many of which have been forced to borrow money at very high interest rates from informal lenders after being snubbed by major banks.
Many are now facing bankruptcy as they struggle to cope with rising wages, inflation and high commodity prices even as demand for their products in China and overseas weakens.
Authorities are expected to further relax restrictions on lending in the coming months to prevent a painful hard landing in the world’s second-largest economy.
There is mounting evidence that the Asian powerhouse is losing steam as demand for its exports in Europe and the US deteriorates and property prices and sales fall across the country.
On Saturday, Chinese Premier Wen Jiabao (溫家寶) again called on banks to “serve the real economy” and make it easier for smaller businesses to access much-needed funding.
He also urged the finance industry to improve “risk monitoring” and prevent “bubbles” and “over speculation” from inflating the economy, Xinhua news agency said, citing a statement issued after a national financial work conference.
Wen’s remarks highlight the growing concern among top leaders about the economy, which grew an estimated 9 percent last year, the slowest pace in a decade.
Export-driven China saw its trade surplus narrow to about US$160 billion last year from US$183 billion in 2010, the Chinese commerce minister said last week, after a year of global economic turmoil.
Despite the grim outlook, the central bank yesterday reiterated the government’s pledge to maintain a “prudent monetary policy” this year, while leaving open the option to “fine-tune” measures as necessary, suggesting any moves to ease credit restrictions would be gradual.