BEIJING, , (Pakistan Point News - APP - 12th Jan, 2017 ) - Chinese bank lending grew far faster than expected in December, the central bank said Thursday, adding to concerns that a flood of credit is increasing financial risks in the world's second-largest economy. New loans extended by banks rose to 1.04 trillion Yuan ($150billion), compared to 794.6 billion yuan in November, said the People's Bank of China (PBoC), the country's central bank.
It was far more than the 676.8 billion yuan estimated in a survey by Bloomberg news. Analysts have been raising alarm bells over the rapid surge in China's debt levels, as Beijing has flooded the market with credit to prop up economic growth and meet its targets. The December burst in lending was partly driven by companies turning to the banking system for loans after a bond market rout, Julian Evans-Pritchard of Capital Economics said in a note.
Looking ahead, credit growth was likely to slow, leading to a slowdown of economic expansion "sooner than many are currently anticipating", he added. Chinese authorities are trying to execute a difficult transition away from dependence on exports and infrastructure spending to consumer-driven growth, but the transition is proving slow. In a separate statement the PBoC said total social financing -- an alternative measure of credit in the real economy -- remained strong at 1.63 trillion yuan in the month, compared to 1.74 trillion yuan the month before. "The government said it would maintain a neutral monetary policy and curb financial risks, but there is no sign of that in the credit data," Wang Tao with UBS Group AG in Hong Kong told Bloomberg.