Premier Wen Jiabao issued a new warning to officials at a State Council meeting Wednesday to rein in investment after industrial output grew at its fastest pace in one-and-a-half years last month and bank credit surged. Central bank figures show new loans surged to US$26 billion in May. New lending in the first five months of the year has reached US$264 billion, already accounting for around 85% of the central bank's annual target of US$312 billion. China's broadest measure of money supply, M2, jumped 19.1% by the end of May from a year earlier, exceeding forecasts and raising expectations the government may take further measures to tighten credit. The figures confirm that a recent interest rate hike and other measures aimed at discouraging investment, particularly in real estate, have not yet had much impact. According to official statistics, overall housing prices in 70 large and medium-sized cities rose 5.8% last month year-on-year, after growing 5.6% in April and 5.4% in March.
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