Chinese policymakers are examining bank lending targets for next year that will equal or even exceed their 2010 quota, despite fears about overheating amid the highest inflation in the country in more than two years.
Most analysts had expected a significant reduction from Beijing’s 2010 target of Rmb7,500bn ($1,100bn) in total new loans, especially after inflation hit 5.1 per cent in November and the government promised to tighten monetary policy.
But on Tuesday, a leading Chinese official newspaper reported that the government’s lending quota would probably again be Rmb7,500bn in 2011.
Officials close to the process stressed that the final quota decision has not been made and the Rmb7,500bn figure is just “one opinion”.
The various regulatory agencies responsible for economic policy are meeting “every day” to discuss how much credit the state-controlled banking sector will be allocated, officials said.
The range under discussion is between Rmb7,000bn and Rmb8,000bn, with the final quota likely to be at the high end, marking an extension of the credit surge launched in late 2008 to combat the financial crisis. Chinese banks gave twice the volume of loans in 2009 over 2008. Despite attempts to rein in loan growth this year, Chinese banks lent roughly the same amount as they did in 2009, once off-balance sheet lending is taken into consideration.
“The market was expecting a credit quota of between Rmb5,000bn and Rmb7,000bn with Rmb7,000bn as the ceiling as the government tries to reduce liquidity and deal with inflation,” said Dorris Chen, of BNP Paribas. “It now appears Rmb7,000bn is the floor for next year rather than the ceiling.”
法国巴黎银行(BNP Paribas)分析师陈睆明(Dorris Chen)表示：“鉴于政府在设法减少流动性，应对通胀，市场原本预期明年新增贷款目标会介于5万亿至7万亿之间，7万亿是上限，但如今看来7万亿是下限，而不是上限。”
The higher-than-expected quota suggests that Chinese leaders are still relatively sanguine about the country’s inflation prospects.
With food, especially vegetables, driving most of the recent price rises, some analysts believe the problem will be short-lived and that inflation may have already peaked.
But analysts say inflation worries are also being overshadowed by concerns that sharply cutting credit could stall growth by leaving many infrastructure and development projects unfunded. BNP Paribas estimates that local government infrastructure projects, many of them launched as part of Beijing’s stimulus to combat the financial crisis, will require as much as Rmb4,000bn in new loans next year.
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