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BEIJING (Reuters) – Chinese banks extended a record 12.56 trillion yuan ($1.82 trillion) of loans in 2016 as the government encouraged more credit-fueled stimulus to meet its economic growth target, despite worries about the risks from an explosive jump in debt.
China’s top leaders pledged after a key meeting last month to stem the growth of asset bubbles in 2017 and place greater importance on the prevention of financial risk, while keeping a “prudent and neutral” monetary policy.
December - Banks - Yuan - Yuan - Loans
But in December alone, Chinese banks extended 1.04 trillion yuan in net new yuan loans, far more than expected and lifting the yearly total well above the previous all-time high set in 2015.
Analysts polled by Reuters had expected December new lending would fall to 700 billion yuan from November’s 794.6 billion yuan.
New - Bank - Loans - Year - Levels
New bank loans last year surpassed the levels of China’s massive credit-led stimulus during the global financial crisis in 2009, according to Reuters calculations based on central bank data. The total was some 8 percent above the previous all-time high of 11.72 trillion yuan in 2015.
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 and contain property bubbles.
Household - Loans - Percent - Loans - Loans
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.
Broad - M2 - Money - Supply - M2
Broad M2 money supply (M2) grew 11.3 percent from a year earlier, central bank data showed on Thursday, missing forecasts.
Outstanding yuan loans ticked up by 13.5 percent by month-end on an annual basis.
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