China central bank says it won't impose lending controls

The People’s Bank of China (PBoC) said Wednesday that economic growth depends on bank loans being used more productively, but it doesn’t plan on administrative action to stem lending growth, the Wall Street Journal reported. This suggests that there will be no return of the loan quotas used to hold down inflationary pressure in 2008. “We should pay attention to the use of market-oriented means – rather than controlling the size,” said PBoC Vice Governor Su Ning. His comments were posted on the central bank’s website just hours after China stocks saw their biggest single-day percentage fall in eight months. Su added that lending should support infrastructure projects, energy efficiency and technological innovation rather than projects in wasteful, polluting sectors. Earlier this week, the banking regulator issued rules on lending for infrastructure investments in an attempt to ensure money goes to the real economy, not the property and stock markets.