Banking

China plans 7t yuan of fresh lending in 2011

(Agencies)
Updated: 2010-12-13 17:24

BEIJING - China is likely to set a target of at least 7 trillion yuan ($1.1 trillion) for new loans in 2011, reported Bloomberg News on Monday, citing two people briefed on the matter.

The government is also aiming for four percent inflation, eight percent economic growth and 16 percent money supply expansion for next year, the sources said, declining to be identified. No final target for new lending has been set and the figure may change, one person said.

The People's Bank of China, the central bank, has a target of 7.5 trillion yuan for new loans for 2010, a ceiling that was almost breached in the first 11 months of the year.

Economists at UBS AG and Bank of America Corp in the past month forecasted that the new-loan quota for 2011 will reach 6.5-7 trillion yuan, the report said.

New lending for 2010 may be higher than official figures suggest, or about nine trillion yuan, when off-balance sheet credits and short-term financing bills that get converted into loans are included, the report cited one of the people.

Related readings:  Lower lending target may affect small banks  China banks slow lending due to quota limits  China may cut lending in '11 to curb prices: Experts

China's banking regulator in August ordered lenders to transfer off-balance sheet loans extended through trust firms back onto their books by the end of 2011 and make provisions equal to 150 percent of potential losses. The move was aimed at curbing the banks' practice of lending proceeds from sales of wealth management products through trust companies.

In addition, China's leaders pledged to give a greater priority to stabilizing prices in 2011 and to better manage liquidity, Xinhua News Agency reported Sunday.