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Thursday, January 12, 2017, 17:24

China's new yuan lending further expands in Dec

By Agencies
China's new yuan lending further expands in Dec
This photo illustration taken on Jan 6, 2017 shows Chinese 100 yuan notes in Beijing. ( FRED DUFOUR / AFP)

BEIJING - China's new yuan-denominated lending surged to 1.04 trillion yuan (US$150.29 billion) in December, up from 794.6 billion yuan a month ago, data from the central bank showed on Thursday.

The increase in December lifted the yearly total to a record 12.56 trillion yuan (US$1.82 trillion), 8 percent above the previous all-time high of 11.72 trillion yuan in 2015.

China's new yuan-denominated lending surged to 1.04 trillion yuan in Dec, up from 794.6 billion yuan a month ago

Lending continued to be driven heavily by robust mortgage growth despite a slew of measures rolled out by local governments late in 2016 to cool sizzling housing prices.

Household loans accounted for 50 percent of total new yuan loans in 2016, while corporate loans accounted for 48 percent.

Medium-to-long-term loans accounted for 78 percent of total new loans, while short-term loans accounted for 11 percent.

Outstanding yuan loans ticked up by 13.5 percent by month-end on an annual basis.

Read more : China bank lending on track for record

The M2, a broad measure of money supply that covers cash in circulation and all deposits, rose 11.3 percent year on year to 155.01 trillion yuan by the end of December, the People's Bank of China said in a statement on its website.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, climbed 21.4 percent year on year to 48.66 trillion yuan.

China's total social financing (TSF), a broad measures of credit and liquidity of the economy, slid to 1.63 trillion yuan in December from 1.74 trillion yuan in November.

But for the full year, TSF also hit a record of 17.8 trillion yuan.

TSF includes off-balance sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

The surge in aggregate financing suggested that off-balance sheet financing and possibly shadow banking activity continued to pick up in December.

China's economy expanded by a steady 6.7 percent in the third quarter and looks almost certain to hit the official full-year 2016 target of 6.5-7 percent, fueled by ample credit, higher government spending and a red-hot property market.

But corporate debt burdens continue to grow. The chief of China's state planning agency vowed on Tuesday to contain high company leverage ratios, saying it will not allow debt of non-financial firms to rise beyond current levels and will step up efforts to encourage companies to restructure their debts.

China is set to release fourth-quarter and full-year GDP data on Jan 20.

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