China economy: bank loans hit record high in first quarter as authorities balance growth and debt risk
- China’s bank lending in the first quarter hit a record high of 7.67 trillion yuan (US$1.17 trillion)
- Banks extended 2.73 trillion yuan in new yuan loans in March, up from 1.36 trillion yuan in February
China’s central bank kept an accommodative policy stance in the first quarter of the year, with lending hitting a record high of 7.67 trillion yuan (US$1.17 trillion) as authorities weigh economic support and risk prevention in the world’s second largest economy.
Quarterly lending was even higher than 7.1 trillion extended in the same period a year earlier, when Beijing unveiled its stimulus package to help combat the economic effects of the coronavirus pandemic, the People’s Bank of China (PBOC) said on Monday.
Sun Guofeng, head of PBOC’s monetary policy department, said the increase in new bank loans met the needs of China’s manufacturing and services industries.
We’ll maintain a reasonable rise of money supply and credit, and balance the relationship between economic growth and risk prevention
In February, outstanding loans to small businesses and medium- to long-term loans for the manufacturing sector jumped 35.5 per cent and 38.8 per cent respectively, he said.
“We’ll maintain a reasonable rise of money supply and credit, and balance the relationship between economic growth and risk prevention,” Sun said at a press briefing.
China has adopted a prudent monetary policy compared to many Western countries, which have launched large stimulus packages to get their virus-hit economies back on track. Regulators in Beijing have pledged continued support for ailing businesses, but there is growing concern about debt risks.