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Chinese financial institutions lent less-than-expected new loans inyuan in April as the economy continued to slow, strengtheningexpectations for further monetary loosening. New yuan-denominated loans reached 681.8 billion yuan (108.2billion U.S. dollars) in April, down 61.2 billion yuan comparedwith a year earlier, China's central bank said Friday. The figure was far below market estimates of around 800 billionyuan, following weak monthly data on investment, industrial outputand consumption released Friday. April's yuan lending was also the lowest this year, compared with1.01 trillion yuan loaned in March, 710.7 billion yuan in Februaryand 738 billion yuan in January, according to the People's Bank ofChina (PBOC). "There was an obvious decline in credit needs in April," said LianPing, chief economist with the Bank of Communications. "Governmentpolicies should put more emphasis on boosting demand in thefuture." Financial regulators should unleash liquidity, drive down marketinterest rates, reduce corporate financing costs and speed up banklending, Lian suggested. Of the new yuan lending, medium- and long-term loans now accountfor less than 25 percent, well below the 50 percent level inprevious years, showing large companies' borrowing demand hasshrunk markedly, said Liu Yuhui, a financial researcher with theChinese Academy of Social Sciences, a government think tank. "April's low lending may foreshadow further slumps in imports andinvestment in future, affecting the economic trend in the secondquarter," he said. China's imports edged up only 0.3 percent year-on-year in Aprilwhile exports climbed 4.9 percent, both well below marketestimates. Urban fixed-asset investment rose 20.2 percent from the year beforein the first four months, the slowest pace since the 17.4 percentgrowth recorded in 2002, the National Bureau of Statistics (NBS)said Friday. In April, industrial value-added output grew 9.3 percentyear-on-year, its lowest pace in nearly three years, while retailsales climbed 14.1 percent, lower than the 15.2-percent increase inMarch. Ba Shusong, an economist with the Development Research Center underthe State Council, or China's cabinet, advised beefing up monetarysupport for the economy while maintaining a prudent policy tone. "The government's fine-tuning measures made some difference, butit's not strong enough to reverse the downward trend," said Ba. The PBOC on Thursday reiterated its stance of maintaining a prudentmonetary policy in the months ahead, saying inflationary risksstill deserve attention. Analysts expect more reductions in the reserve requirement ratiofor banks in the short term and interest rate cuts in the second orthird quarter, but note that the central bank remains wary of pricerebounds. China's consumer price index, a main gauge of inflation, rose 3.4percent year-on-year in April, easing slightly from the 3.6-percentrate registered in March, the NBS said Friday. "All the indicators create more leeway for the central bank toadjust its policies," said Zhou Wenyuan, an analyst with GuotaiJunan Securities. Meanwhile, Liu said an outflow of deposits in April may slow banklending growth in May and restrict future expansion of investment. The PBOC data shows yuan-denominated deposits fell by 465.6 billionyuan in April, compared with a growth of 342.4 billion yuan in thesame period of last year. New loans in foreign currencies in April were worth 9.6 billionyuan, 39.6 billion yuan less than the same period last year, thePBOC said. M2, a broad measure of money supply that covers cash in circulationand all deposits, rose 12.8 percent year-on-year to 88.96 trillionyuan at the end of April. The growth was slower than the 13.4 percent rate a month earlierand the 14-percent annual target set by the government. The narrow measure of money supply (M1), which covers cash incirculation plus demand deposits, climbed 3.1 percent year-on-yearto 27.5 trillion yuan at the end of April. The increase was 1.3percentage points lower than a month earlier. Preliminary data shows the country's social financing, a measure offunds raised by entities in the real economy, totaled 959.6 billionyuan in April, 407.7 billion yuan less than the same period of 2011and sharply down from 1.86 trillion yuan in March. In April, cross-border trade deals settled in yuan reached 196.2billion yuan, while yuan-denominated cross-border direct investmenttotaled 21.7 billion yuan, according to the PBOC. I am an expert from led-heatsinks.com, while we provides the quality product, such as Furniture Hardware Hinges , Volume Control Knob Manufacturer, LED Aluminum Heat Sink,and more.
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