China to keep moderate credit growth

16  January 2013

BEIJING — China will maintain moderate growth in its credit supply and social financing scale this year in a bid to stabilize growth while keeping consumer prices in check, the central bank said on Friday.

The government will continue to implement a prudent monetary approach in 2013, making the policy more forward looking, targeted and flexible, the People’s Bank of China said in a statement on its website.

It will focus on coordinating the works between stabilizing growth, economic restructuring, price control and risk prevention, and keep steady and moderate growth of credit and social financing, according to the statement.

It means that both lending and social financing in 2013 will be higher than the amount recorded last year, as the economy’s slowing growth has prompted the government to shift focus to securing growth, analysts said.

China’s third-quarter growth slowed to a seven-quarter low of 7.4 percent, dragged down by anaemic external demand and government efforts to cap consumer prices.

But authorities have been cautious in easing monetary policy in fear of pushing up inflation again. The central bank twice cut interest rates and banks’ reserve require ratios last year, and stopped similar moves after August.

China’s new yuan-denominated lending reached 8.2 trillion yuan ($1.31 trillion) in 2012, up from 7.47 trillion yuan in 2011 and 7.95 trillion yuan in 2010, the central bank’s data showed.

The country’s total social financing, a measure of funds raised by entities in the real economy, reached 15.76 trillion yuan last year, up 2.93 trillion yuan from 2011, the data showed.