Loans boost wanted for China GDP

Julian Harris
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CHINA’S government wants at least seven trillion yuan (£662bn) of new bank loans made next year, in a bid to keep its economic boom on track, it was revealed yesterday.

The surprising news came after a signal on the weekend towards more “prudent” monetary policy, to tackle the country’s price inflation.

Consumer prices rose by 5.1 per cent in November compared to last year, the sharpest rise since July 2008.

The government was expected to increase the cost of lending by increasing rates by the year end. And last week increased the reserve requirement ratio (RRR) for banks for the sixth time this year, and the third time in the last five weeks.

Yet the central bank is content to raise the inflation target to four per cent, and wants loans to maintain economic growth of at least eight per cent, an insider told Bloomberg.