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China bank lending down 43 percent in 1st quarter
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China bank lending down 43 percent in 1st quarter
AP - Tuesday, April 13
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SHANGHAI – Lending by Chinese banks fell 43 percent in the first quarter from a year earlier as the government winds down its stimulus and tries to cool a credit boom while keeping its recovery on track, central bank data showed Monday.
Banks lent 2.6 trillion yuan ($380.7 billion) in the January-March quarter, the People's Bank of China said on its Web site. That compared with 4.6 trillion yuan ($670.6 billion) in loans in the first quarter of 2009 as banks ramped up loans for construction and other projects as part of a 4 trillion yuan ($586 billion) stimulus.
The figures indicated the central bank's efforts to prevent runaway lending and restore financial discipline in China's state-owned banking industry might finally be taking hold, lessening the need to raise interest rates to curb inflation.
The tightening on lending reflects worries that many of the loans issued in the past year or more may go sour and that easy credit is fueling wasteful investments.
On Sunday, the chairman of the China Banking Regulatory Commission, Liu Mingkang, announced an aggressive plan to assess the safety of loans made to financing entities set up by local governments to invest in real estate, infrastructure and other projects.
Consumer prices rose 2.7 percent in February over a year earlier, up from January's 1.5 percent increase and near the government's official ceiling of 3 percent inflation for the year.
Over the weekend, the government reported China ran its first trade deficit in nearly six years in March, as a surge in imports outpaced export growth. Officials said the trend was likely to be short-lived but signaled a return to more balanced trade after years of massive surpluses.
Economic growth and other data for the first quarter are due to be released Thursday.
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