SHANGHAI, , (Pakistan Point News - APP - 11th Nov, 2016 ) - Chinese bank lending almost halved month-on-month in October, official data showed Friday, as Beijing moved to rein in credit risks but with national holidays also an issue. New loans extended by banks fell to 651.3 billion Yuan ($95.6 billion) last month, compared with 1.22 trillion yuan in September, said the People's Bank of China, the country's central bank. Lending surged in August and September as the government injected credit into the economy to spur activity, but the rapid rise in borrowing sparked alarm and Beijing has tried to curb the expansion.
"Looking ahead, we expect broad credit to resume its slowdown slide in coming months, as Chinese policymakers continue to prioritise tackling credit risks over boosting economic activity, which has held up well recently," Julian Evans-Pritchard of Capital Economics said in a note. Analysts with ANZ bank also pointed to seasonal factors, as "banks usually slow their lending activities" in the fourth quarter as they approach their annual lending quotas.
The first week of October is also a national holiday in China. China's economy showed signs of stabilising in October, with manufacturing data surging to a more than two-year high. The producer price index also rose 1.2 percent year-on-year, after ending more than four years of falls in September. But exports fell for the seventh consecutive month. China will release more economic indicators on Monday including industrial output and retail sales. In a separate statement, the central bank said total social financing -- an alternative measure of credit in the real economy -- also plunged to 896.3 billion yuan from the 1.72 trillion yuan in September. China's total debt hit 168.48 trillion yuan ($25 trillion) at the end of last year, equivalent to 249 percent of GDP, the China academy of Social Sciences has estimated.