Date
14 December 2017
New loans in May grew 12.4 percent, beating expectations of a slight fall. M2 was up 13.4 percent year on year. Photo: Reuters
New loans in May grew 12.4 percent, beating expectations of a slight fall. M2 was up 13.4 percent year on year. Photo: Reuters

China new loans in May higher than expected

Chinese banks extended new yuan loans of 870.8 billion yuan (US$141.6 billion) in May, 12.4 percent more than in April, according to the People’s Bank of China.

The figure compares with market expectations of a slight fall to about 730 billion yuan, Sohu Finance reported.

M2, the broadest measure of money supply, grew 13.4 percent year on year in May, accelerating from 13.2 percent growth in April, while M1 growth climbed to 5.7 percent compared with a 5.5 percent increase in April, it said.

Social finance aggregate was 1.4 trillion yuan, down 145.4 billion from April but up 217.4 billion from the previous year, the report said.

The figures show the world’s second largest economy is pulling out of a soft patch but the recovery appears patchy, Reuters reported. It said a mini stimulus has helped.

On May 30, the State Council bolstered the role of the financial sector in the economy by expanding the use of targeted reserve requirement ratio for banks that lend to rural enterprises and small businesses.

Beijing could roll out more support measures, especially if the property market starts to deteriorate rapidly, analysts were quoted as saying.

Meanwhile, more data is needed to confirm a broad-based stabilization in the economy, said Yao Xuekan, an analyst at Essence Securities.

The government is due to release industrial output, retail sales and fixed-asset investment on Friday.

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