Beijing, China (4E) – Lending among Chinese banks increased by higher than expected last month, as the country’s communist leaders attempt to balance concerns about rising debt and slowing economic growth momentum.
In January, banks in China provided 1.32tn yuan ($218bn) of new yuan loans, an increase from 482.5bn yuan in December, according to the People’s Bank of China report released Saturday.
Chinese financial institutions typically front-load their borrowing at the start of the year, so huge increases are usually common. Saturday’s result indicates Beijing’s actions about credit expansion are not slowing down borrowing.
M2, the country’s broadest measure of money supply, climbed 13.2 percent from the previous year, as shown on the website of the Beijing-based central bank. The figure compared with economist’s median estimate of 13.2 percent and 13.6 percent in December.
Total social financing, a broader gauge of credit in the economy, increased to 2.58tn yuan last month from 1.23tn yuan in December, which is also higher than 2.54bn yuan posted in January 2013.
Chinese President Xi Jinping and Premier Li Keqiang are seeking to balance reining in expansion of credit and shadow banking that offer risks of a financial crisis with helping the economic expansion that is estimated to the slowest in 24 years this year, according to analysts.