New bank loans in China rose more than expected in March from the previous month due to strong corporate and household demand, as the central bank walks a tightrope between supporting the rapidly recovering economy and containing debt risks, reported Reuters.
Chinese banks extended RMB 2.73 trillion ($416.62 billion) in new RMB loans in March, up from RMB 1.36 trillion in February and exceeding analyst expectations of RMB 2.45 trillion, according to data released by the People’s Bank of China (PBOC) on Monday.
That pushed bank lending in the first quarter to a record high of RMB 7.67 trillion, according to Reuters’ calculations. It beat the previous peak of RMB 7.1 trillion in the first quarter of 2020, when policymakers began rolling out unprecedented measures to deal with the shock from the coronavirus crisis.
The surge in loans has led to worries among authorities, with financial regulators telling banks to trim their loan books this year to guard against risks emerging from bubbles in domestic financial markets, sources told Reuters last month.