China new bank loans surge in September

Dhaka,  Tue,  06 December 2016
Published : 18 Oct 2016, 21:16:25

China new bank loans surge in September

SHANGHAI, Oct 18 (AFP): New loans by Chinese banks in September surged nearly 30 per cent from the previous month, official data showed Tuesday, deepening concern about risky credit expansion in the world's second largest economy.

New loans extended by banks jumped to 1.22 trillion yuan ($181.3 billion) last month from 948.7 billion yuan in August, said the People's Bank of China, the central bank.

Beijing has relied on stimulus measures such as loose credit to boost the economy, which faces a tough structural transition and sluggish global demand. But the rapid rise in borrowing has sparked alarm.

The International Monetary Fund warned earlier this month that China's dependence on debt was growing at a "dangerous pace" and called on Beijing to curb credit growth.

"By maintaining high near-term growth momentum in this manner, the economy faces a growing misallocation of resources and risks an eventual disruptive adjustment," it said.

China is set to release a set of economic indicators on Wednesday, including third-quarter GDP growth, industrial output and retail sales.

While the lingering effect of earlier easing may prop up growth in coming months, Beijing is expected to slow down the pace of lending, Capital Economics China economist Julian Evans-Pritchard said in a response to the latest figures.
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