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China banks scale back lending in April

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(Globalpost/GlobalPost)

Chinese banks lent less in April than March, official data showed Friday, after other recent indicators suggested a rebound in the world's number two economy was flagging.

Banks extended a total of 792.9 billion yuan ($129 billion) in new loans last month, down from 1.06 trillion yuan in March, according to the central People's Bank of China.

Total social financing, a broader measure of credit, totalled 1.75 trillion yuan in April, it said in a statement, falling from 2.54 trillion yuan the previous month.

But analysts said the April lending figures were better than expected and it was premature to interpret the fall as credit tightening because monthly figures tend to be volatile and affected by seasonal factors.

Authorities were likely to keep monetary policy relatively loose to boost economic growth, which has lost momentum in recent months, they said.

China grew at its slowest pace in 13 years in 2012, with gross domestic product expanding 7.8 percent in the face of weakness at home and in key overseas markets.

Economic growth rebounded to 7.9 percent in the final quarter of 2012, raising hopes for a recovery, but in the first three months of this year growth slowed to 7.7 percent.

The official purchasing managers' index (PMI), a widely watched indicator of the health of the Chinese economy, slowed to 50.6 in April from 50.9 in March.

Separately, industrial output -- which is crucial to job creation -- slowed in the first quarter to 9.5 percent, from 10 percent in October-December.

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http://www.globalpost.com/dispatch/news/afp/130511/china-banks-scale-back-lending-april