(19 January 2010 – China) Wen Jiabao, the Premier of China, has pledged to slow the surge of credit experienced at the beginning of this year, amid reports that the nation’s central bank has cut lending allowances for banks by 10 percent for 2011.Concerns are mounting that slurry of bank loans being made on the back of rapid capital inflows is fuelling inflation.
In a statement published on the government’s website, www.gov.cn, the Premier said that they must avoid abnormal issuance of credit at the start of the year.
In the first week of January alone, Chinese banks forked out 500 billion yuan (A$75.6 billion).
This followed 7.95 trillion yuan in new loans made in 2010, overtaking the government’s 7.5 trillion yuan target.
Mr Jiabao said that the government would use a mix of policy tools to ensure reasonable expansion in credit and money supply.
In addition, Beijing would maintain its year-long campaign to curb speculative demand on housing, Mr Jiabao said.