国内英语新闻:China's bank credit hits record high in first quarter

BEIJING, April 11 (Xinhua) -- Credit extended by China's banks in the first quarter hit 4.58 trillion yuan (670 billion U.S. dollars), the People's Bank of China (PBOC) said Saturday.

    In March alone, new yuan-denominated loans increased 1.89 trillion yuan. It was the third straight month that new loans exceeded 1 trillion yuan.

    "It is not beyond market expectations. The increase was boosted by the 4-trillion-yuan stimulus plan and showed the possibility of a faster economic recovery in China compared with other countries," said Zhang Qizuo, vice director of China International Economy Society.

    Premier Wen Jiabao said on March 5 at the opening of the annual session of the National People's Congress, China's legislature, that new yuan-denominated loans this year were expected to reach 5 trillion yuan.

    Historical data show the first-quarter bank credit usually accounts for more than 60 percent of the year's total.

    "There is a time lag between the credit increase and actual use of capital, but the big increase will surely lay a solid foundation for the recovery of the real economy," said Zhang.

    In the first quarter, the central bank withdrew 47.3 billion yuan from circulation, 78.5 billion yuan more than the same period of last year.

    "The increase in currency withdrawal from circulation showed the central bank was carefully watching the credit growth," said Yuan Gangming, an economist with Tsinghua University.

    Zhuang Jian, an economist at the Asian Development Bank, said the regulators should pay attention to the quality of new loans and prevent bad loans.

    By the end of February, non-performing loans by Chinese banks totaled 1.53 trillion yuan, 17.5 billion yuan less than the start of the year.

    The structure of credit growth was also improving. The proportion of bill financing fell to about 22 percent in March from 47 percent in February, though still much higher than the average of 5 percent.

    "The decline in bill financing is a good sign. It means company activities are increasing and the credit's impact on the economy is strengthening," said Zhuang.

    Through March, the M2 figure -- a broad measure of money supply,which covers cash in circulation and all deposits -- grew 25.5 percent from a year earlier to 53.06 trillion yuan.

    The narrow measure of money supply, M1 (cash in circulation pluscorporate current deposits), was up 17.04 percent year on year to 17.65 trillion yuan.

    "The fast rebound of M2 indicates China's liquidity is abundant. This is very important to the economic recovery. The sharp rise of M1 shows companies are increasing spending on investment and management." said Zhang Bin, an economist with Chinese Academy of Social Sciences.