CHINA'S bank lending fell in November from a year earlier while total social financing expanded slower, as banks are cautious toward lending at year-end.
Chinese banks extended 522.9 billion yuan (US$84 billion) of local-currency loans, the People's Bank of China said yesterday. That was lower than a 550 billion yuan median estimate in a Bloomberg News survey and 562.2 billion yuan in the same month of last year.
Total social financing, including loans, bank acceptance bills, corporate bonds and equity financing, was 1.14 trillion yuan in November, 183.7 billion yuan higher than last year but lower than October's 1.29 trillion yuan. The rise was lower than a monthly average of 1.32 trillion yuan in the third quarter of this year.
Economists said that banks are reluctant to lend by the year-end and that the current liquidity is enough to support a rebound of economic growth in the coming quarters.
"Corporate demand for credit has been weak partly due to seasonal reasons," said Stephen Green, chief China economist of the Standard Chartered Bank. "New projects may not start until next March, and banks are usually more cautious toward lending in the fourth quarter."
But he said banks have lent more than they did last year with the economic situation starting to stabilize.
Lu Zhengwei, chief economist of the Industrial Bank, said the easier monetary environment in the second half will help the economy to rebound until the next quarter, but the availability of funds next year is uncertain.
Total yuan lending in the first 11 months of this year reached 7.75 trillion yuan, exceeding 7.47 trillion yuan lent in the whole of last year.
Total social financing during the same period came to 14.15 trillion yuan, 2.6 trillion yuan more than a year earlier, the central bank data showed.
M2, the broadest measure of money supply, rose 13.9 percent year on year, short of an annual target of 14 percent.
"Despite the mild slowdown in the growth of November's total social financing, the still healthy levels of credit being created suggest that quantitative easing is working," the HSBC said in a report yesterday. "Overall financing conditions also remain favorable for China's ongoing growth recovery."
The report also noted the share of direct financing edged up in November from a month ago, which is a welcome development for China's plans for continued financial reform.
Cumquat market in S China's Guangxi
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