New bank loans in China are already 30% of the government’s full year 7.5 trillion-yuan target, according to the latest March data. The year to date loans figure sounds large relative to the target, but it could be because loans are usually front-loaded each year. On a year over year basis, new loans have been fallen for January, February, and March, as shown below.
The fresh credit for the first three months is about half of the record 4.58 trillion yuan disbursed by Chinese banks a year ago, when the economy took a hard hit from the global financial crisis.
The average monthly new loans in the first quarter stood at around 860 billion yuan, compared with 444.2 billion yuan and 1.5 trillion yuan during the same periods of 2008 and 2009.
“The pace of credit growth will gradually return to normal as the record money supply from a year back would help shore up the Chinese economy effectively,” a source at the nation’s banking regulator said.
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