Chinese bank loans beat expectations as Beijing props up growth
By Aileen Wang and Kevin Yao
BEIJING (Reuters) - Beijing stepped up efforts to re-energize China's economy in June, pumping in more money and pressing banks to extend more loans, but analysts say more stimulus will be needed to sustain recovery.
Data over the past week offers some signs that the world's second-largest economy steadied in the second quarter as government stimulus measures kicked in, though exports remained sluggish, piling pressure on Beijing to stoke domestic demand.
A cooling property market also points to risks in the second half and could well determine the scope of further policy easing, after Premier Li Keqiang promised the economy would grow by at least the targeted 7.5 percent this year.
Separate remarks by Chinese central bank officials, published in local media on Tuesday, suggested policy loosening is underway with more to come.
Chinese banks are likely to make new loans worth 9.5 trillion yuan ($1.5 trillion) this year in their strongest lending surge since the 2009 global financial crisis, Sheng Songcheng, the head of the statistics department at the central bank, was quoted as saying.
Chinese financial news service Great Wisdom also quoted Sheng as saying banks have increased lending to a cooling property market this year in a show of "forceful" support.
Another Chinese news report quoted Xu Nuojin, a deputy director at the statistics department at the central bank, as saying China should cut taxes, lower companies' borrowing costs, and reduce the amount of cash that banks must hold as reserves to lift its economy.
Data shows Chinese banks, which Beijing uses as a policy tool, lent a further 1.08 trillion yuan ($174 billion) in June, nearly 20 percent more than market expectations. Continued...