Lending in China Seen to Dwindle in 2010

China's credit growth in 2010 could fall well below this year's total and market expectaions as mainland banks are expected to lend five trillion yuan (HK$5.68 trillion) to eight trillion yuan next year, reports a Reuters story published in the South China Morning Post.


According to Reuters, banks answered the government's call this year to issue a flood of credit to help fight off the global financial crisis, putting them on track for a record of about 9.5 trillion yuan in new loans.


"It is hard to continue [to support the economy] if new loans are below five trillion yuan next year, but a level higher than eight trillion yuan will pose serious inflationary pressure," Yin Zhongqing, a deputy head of the finance and economic committee under the National People's Congress, told Reuters. "I think five trillion to eight trillion yuan in new loans next year would reflect the appropriately loose monetary policy."


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