New loans beat expectations in May

Chinese banks issued RMB793.2 billion yuan (US$125 billion) in new loans in May, as the country increased support for investment projects to help offset an economic slowdown, Bloomberg reported. Total lending was the most on record for the month of May and more than the media analyst forecast of RMB700 billion. More money went into long-term lending; loans extended for a year or more accounted for 34% of the total in May, up from 28% in April, signaling that the capital was more likely being channeled into growth-boosting investments rather than short-term financing, said Zhang Zhiwei, the Hong Kong-based China economist at Nomura. M2, the broadest measure of money supply, grew 13.2% in May from a year earlier, above expectations and the April gain of 12.8%.