The central government's efforts to cool down overheated
economic sectors are producing results, according to the latest
money supply figures from the central bank's Shanghai headquarters,
which were released yesterday.
Renminbi lending at the city's domestic banks slowed again last
month, with the value of new loans increasing by just 40 percent of
the average monthly increase for the first half of the year, as a
result of a string of macro-control measures launched this
year.
The figures are widely seen as a reflection of the national
trend, as the Beijing-based People's Bank of China is expected to
release national figures for July soon.
While renminbi lending by Shanghai-based Chinese banks in June
was up 24.23 billion yuan (US$3.2 billion) year on year, in July,
loans were down 920 million yuan year on year.
This represents a declining trend, the statement said.
The central bank said the largest year-on-year decline, of 3.87
billion yuan, in lending in July occurred in the real estate
sector, followed by the utility maintenance and transportation
industries.
Lending for individual consumption continued the growth trend
that began in the first half of the year as mortgage lending
recorded growth of 5.87 billion yuan in July year on year.
"In July, lending at Shanghai's domestic commercial banks
maintained a momentum of decline indicating the influence of
multiple macro-control policies launched this year on Chinese
commercial banks' use of their funds," the statement said.
Late last month, the central bank raised the amount lenders must
hold in reserve by 0.5 percentage points, the sixth hike this
year.
After the increase takes effect on Wednesday, the reserve
requirement ratio will be 12 percent for big lenders.
It follows the raising of benchmark interest rates by 0.27
percentage points less than three weeks ago and cutting the tax on
interest income from 20 percent to 5 percent in a coordinated move
to reduce liquidity and stabilize the blistering economy.
Authorities also said yesterday that deposits and lending at the
city's foreign financial institutions were picking up.
The outstanding renminbi lending at Shanghai-based foreign banks
jumped 76.7 percent last month, year on year, which mainly flowed
to the manufacturing, property, wholesale and retail
businesses.
(China Daily August 10, 2007)
