Lending jumps to $88 b, fuelling the concerns
The Financial Express, January 12, 2010, Page 18
Beijing: Chinese bank lending surged in the first week of 2010, a state newspaper reported on Monday, adding to the concerns fuelled by blockbuster trade data for December that the world's third-largest economy is overheating.
Despite the indications of gathering economic momentum, Finance Minister Xie Xuren said China would stick to its pro-growth fiscal stance, warning that withdrawing stimulus spending too early could damage the economy.
New loans amounted to about 600 billion yuan ($88 billion) in the first week of January, nearly twice as much as the monthly average in the second half of 2009, the Economic Information Daily reported.
Corporate treasurers see tighter monetary policy down the road and as a result are front-loading their funding needs. That may only make officials move quicker to normalise policy, Isaac Meng, an economist with BNP Paribas in Beijing, said.
"In terms of credit controls, our expectations for a hike in reserve requirements should be brought forward from the end of the first quarter," said Meng, who had pencilled in loan growth of 800 billion yuan for all of January.
"Inflation is heading to 3-4 percent in the next few months. It is no longer just expectations, it is becoming a reality," he said. China's consumer price index rose 0.6 percent in the year to November, which marked the first increase since January.
The lending news came a day after trade figures showed much stronger-than-expected growth in both imports and exports. The strong economic signs pushed up Asian stocks to a 17-month high on Monday and helped to lift oil prices to the highest level since October 2008.
The Financial Express, January 12, 2010, Page 18
Beijing: Chinese bank lending surged in the first week of 2010, a state newspaper reported on Monday, adding to the concerns fuelled by blockbuster trade data for December that the world's third-largest economy is overheating.
Despite the indications of gathering economic momentum, Finance Minister Xie Xuren said China would stick to its pro-growth fiscal stance, warning that withdrawing stimulus spending too early could damage the economy.
New loans amounted to about 600 billion yuan ($88 billion) in the first week of January, nearly twice as much as the monthly average in the second half of 2009, the Economic Information Daily reported.
Corporate treasurers see tighter monetary policy down the road and as a result are front-loading their funding needs. That may only make officials move quicker to normalise policy, Isaac Meng, an economist with BNP Paribas in Beijing, said.
"In terms of credit controls, our expectations for a hike in reserve requirements should be brought forward from the end of the first quarter," said Meng, who had pencilled in loan growth of 800 billion yuan for all of January.
"Inflation is heading to 3-4 percent in the next few months. It is no longer just expectations, it is becoming a reality," he said. China's consumer price index rose 0.6 percent in the year to November, which marked the first increase since January.
The lending news came a day after trade figures showed much stronger-than-expected growth in both imports and exports. The strong economic signs pushed up Asian stocks to a 17-month high on Monday and helped to lift oil prices to the highest level since October 2008.
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