PBoC official warns banks on lending growth

The People’s Bank of China (PBoC) has warned commercial banks about rapid loan growth due to fears that some of the new loans are being channeled into stock and property investments, the South China Morning Post reported. An assistant governor of the central bank, Li Dongrong, told lenders in Zhejiang province last week to “enhance lending management” and “reasonably control lending targets,” according to comments posted on the PBoC website on Monday. Analysts said Li’s comments signal that the central bank is beginning to side with the China Banking Regulatory Commission in its concerns about lending growth in China. However, a major shift in monetary policy is unlikely. New loans in the first half soared to US$1.1 trillion compared to US$358.5 billion in the same period last year. Roughly 20% of those new loans flowed into the stock market, according to the State Council’s Development and Research Center.