China sets 8 trln yuan 2012 loan target -sources
By Kevin Yao
BEIJING Jan 11 (Reuters) – China has set a target of
8 trillion yuan ($1.27 trillion) in new local-currency bank
loans and 14 percent growth in broad M2 money supply for 2012,
three sources familiar with government plans told Reuters on
Wednesday.
That marks a rise from 7.47 trillion yuan in new bank loans
and annual M2 growth of 13.6 percent achieved in 2011, implying
a further loosening of policy by the People’s Bank of China to
support the economy as growth loses steam and inflation cools.
The central bank was believed to have set a 7.5 trillion
yuan loan target for 2011, although it did not disclose it.
Bank lending is core to China’s economic policy making as
the central bank effectively decides how much money commercial
banks can lend and how much credit is created in the economy.
“The government has stressed (policy) stability while
seeking advancement — there is a need to advance,” said one
source at a top think tank that directly advises the government,
who declined to be identified.
China’s cabinet — which sets the policies that the central
bank implements — announced in October that it would fine-tune
policy to support the economy.
The PBOC in late November cut the ratio of cash that banks
must hold as reserves for the first time three years, taking the
rate down by 50 basis points from a record high of 21.5 percent.
Steady policy easing is expected in the coming months.
The sources — all with top level think tanks — also said
China’s leaders aimed for 7.5 percent gross domestic product
growth this year, while keeping annual inflation near 4 percent.
The sources added that a growth target below the 8 percent
that has been set for each of the last seven years, showed
Beijing’s greater tolerance of slower growth which would make
pressing ahead with structural reforms easier.
But analysts believe the economy will still ultimately grow
more than 8 percent as the central bank eases monetary policy.
China’s economy is on track to slow for a fourth successive
quarter as demand slackens at home and abroad.
China’s annual GDP growth in the fourth quarter of 2011 may
have slowed to 8.7 percent from 9.1 percent in Q3, according to
the latest Reuters poll.
But full-year growth is expected to be comfortably over 9
percent.
The government is likely to ensure relatively fast growth in
fixed-asset investment and retail sales this year to cushion the
economy from the global downturn, analysts say.
The annual economic targets will be formally announced by
the government in March during the annual parliament meeting.
Article source: http://www.reuters.com/article/2012/01/11/china-economy-loans-idUSL3E8CB7F720120111
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