CHINA was likely to set a target of at least 7 trillion yuan (US$1.1 trillion) in new loans for 2011, said two people briefed on the matter.
The government also aimed for 4 percent inflation, 8 percent economic growth and 16 percent money supply expansion for next year, the people said, declining to be identified because the information was not public. No final target for new lending had been set and the figure could change, one person said.
China moved to rein in lending this year after record credit growth in 2009 caused inflation to quicken and home prices to surge. The central bank has a target of 7.5 trillion yuan in new loans for 2010 a ceiling that was almost breached in the first 11 months of the year and has forced banks to set aside more deposits as reserves three times in five weeks.
Economists at UBS AG and Bank of America Corp. in the past month forecast a new-loan quota of 6.5 trillion yuan to 7 trillion yuan for next year.
New lending for this year could be higher than official figures suggest, or about 9 trillion yuan, when off-balance sheet credits and short-term financing bills that were converted into loans were included, one of the people said.
Officials at the State Council did not immediately respond to a fax seeking comment, and a press officer at the People s Bank of China didn t return two calls to her office.
The government would continue to use loan quotas, reserve ratio requirements, bad-debt reserves and capital ratios to manage loan growth and liquidity in 2011, May Yan, a Hong Kong-based analyst at Barclays Capital, wrote in a note to clients yesterday. She predicted a credit quota of 7 trillion yuan for next year. (SD-Agencies)
