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China urges 'reasonable' credit growth in 2010: state media
Beijing (AFP) Dec 8, 2009 China's central bank Tuesday said it wanted to maintain credit expansion at a "reasonable pace" in 2010 to support recovery but curb potential risk after record lending this year, state media reported. Lending should be focused on supporting employment and industries of "strategic importance," Zhou Xiaochuan, governor of the People's Bank of China, was quoted as saying by official news agency Xinhua. In response to the conclusion of an annual key economic meeting Monday, the bank said it would continue with a moderately loose monetary policy in 2010 to ensure stable and "relatively fast economic development," the report said. The bank would look to boost rural development and stimulate domestic demand, avoid imbalances in the economy and curb "potential financial risks," the report said. The comments coincided with a statement Tuesday from the Banking Regulatory Commission, which called on banks to control risk, while continuing to issue loans that support recovery. The commission said it would increase credit support to small and medium-sized companies and the agricultural sector, while strictly curbing lending to sectors with overcapacity and high energy consumption and emissions. Such messages demonstrate China's efforts to strike a balance between helping the economy and preventing risks in the banking sector following massive lending this year as fears of asset bubbles increase. Chinese banks lent a record 8.92 trillion yuan (1.31 trillion dollars) in the first ten months, as institutions heeded government calls to pump money into the world's third largest economy and drive recovery. The figure declined significantly to 355.9 billion yuan in July before rebounding in August and September amid concerns that much of the money had been funnelled into stocks and property at the risk of inflating asset prices. China's banking watchdog recently tightened capital requirements for banks on concerns rampant lending would lead to a sharp rise in bad debts. Share This Article With Planet Earth
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