China bank lending slows in July

Agence France Presse

Posted at Aug 11 2010 11:41 AM | Updated as of Aug 11 2010 07:41 PM

BEIJING - Chinese banks issued 532.8 billion yuan ($78.8 billion) in new loans in July, the central bank said Wednesday, as Beijing maintained its curbs on lending to avoid overheating in the economy.

New lending for July represented a measured slowdown from June, when banks issued 603.4 billion yuan in new loans, according to figures posted on the website of the People's Bank of China.

The lending total for July was lower than the 600-billion-yuan forecast of economists polled by Dow Jones Newswires.

M2, the broadest measure of money supply, which includes cash and money in savings accounts, rose 17.6 percent at the end of July from a year earlier, lower than the 18.5%  increase at the end of June.

China has powered out of the global financial crisis on the back of a four-trillion-yuan stimulus package and state-sanctioned bank lending that saw loans nearly double to 9.6 trillion yuan in 2009.

But worried about a potential rise in bad loans and inflation, the government has clamped down on lending and has set a loan target of 7.5 trillion yuan for this year, a 22 % drop from last year.