China targeting moderate credit growth
Credit and Loan March 2nd, 2010
China’s central bank targets a moderate credit growth this year signals the government’s efforts to curb the expansion of the loan.
People’s Bank of China said the government needs to support economic growth relatively quickly but still controlling inflation expectations.
China was trying to consolidate the recovery by preventing excess liquidity in the financial system could cause inflation spikes, the manipulation of assets, and bank bad debts.
Liu Mingkang, the banking authority officials, in an opinion written to Bloomberg News this week said that while this sector has more than enough capital, but the structural bubbles are still a threat.
“I can not doubt that excessive credit and it explains why the authorities began to worry about credit portfolio this year,” said Qu Hongbin, chief China economist at HSBC Holdings Plc in Hong Kong.
Qu provides estimates of new loans will be limited to 7 trillion yuan (U.S. $ 1 trillion) in 2010. A number of banks including Industrial & Commercial Bank of China Ltd., to distribute credit in the amount of unexpected reach 9.21 trillion yuan during the 11 months in 2009, higher than 4.15 trillion yuan a year earlier.
China’s central bank also limit the volatility of credit and oversee the property market and will stabilize the stock market operations.
