Banking News
- New loan quotas fixed for banks
Date: 28-Dec-2007 Sources: (Shenzhen Daily)
THE central bank has set 2008 quotas for new lending by the Big Four State banks to curb credit growth, a banking source said yesterday.
Industrial and Commercial Bank of China, China Construction Bank Corp. and Agricultural Bank of China were told to keep new loans in 2008 within this year's targets, which were 365 billion yuan (US$49.77 billion), 350 billion yuan and 310 billion yuan respectively, the source at one of the banks told reporters.
The 2008 new lending quota for Bank of China was trimmed to 260 billion yuan from 280 billion yuan this year, the source said.
Separately, a senior government economist warned Tuesday that the country should avoid overly stringent bank lending curbs in 2008 lest it hamper economic growth.
The central bank should set 2008 target rates of 16 percent for broad money supply growth and 14.5 percent for yuan loan growth, Xia Bin, a senior researcher in the Development Research Center, a think tank under China's Cabinet, told a forum.
The central bank has yet to reveal its 2008 loan expansion target, although the market is expecting a big drop from the 2.9 trillion yuan (US$395 billion) new loan level set for 2007. It targeted 16 percent growth in the M2 money supply this year.
China has pledged to tighten its monetary policy in 2008 to head off inflation and economic overheating. It has already stepped up its usual year-end clampdown on bank lending and policy-makers have suggested this will continue in the new year.
'Too low a loan extension target and overly tight controls will have a very big impact on the economy,'Xia said.
Slowing U.S. growth and consumption would help China to meet its goal of cutting its huge trade surplus, he said.
Policies were already in place for China to address its range of economic worries, from excessive capital spending to a surge in its foreign exchange reserves, and it was just a matter of implementing them effectively, Xia said.
He also said China's high inflationary pressures would persist, stemming from rapid money supply growth rather than a spike in consumer demand.
Li Yang, a senior economist at the Chinese Academy of Social Sciences, told the same forum that China's recent decision to impose quarterly limits on bank loans was a step backwards in policy and could have come from the planned economy era.
Sponsor Results:
