Central bank may spur lending if necessary

China's central bank will fine-tune its monetary policy and spur lending when necessary, a senior central bank official was quoted as saying Wednesday.

The government has taken a series of measures to tighten credit since mid-2003, worried lending was driving sky-high investment growth and threatening to turn boom in China¡¯s economy to bust.

"The central bank will use adjustments to promote lending by commercial banks once credit growth becomes inadequate to economic growth," the China Securities Journal quoted Tang Xu, head of the central bank¡¯s research bureau, as saying.

The central bank said that it aimed for broad money supply growth of about 15 percent this year, compared with an estimated 14.5 percent rise for last year. ¡°We don¡¯t think that the monetary policy is tight. The stable monetary policy can be achieved through constant adjustments.¡±

The central bank also said it targeted a total of 2.5 trillion yuan (US$31.2 billion) in new loans this year, up from the estimated 2.2 trillion yuan given out last year.

The central bank had targeted 17 percent broad money supply growth for last year and 2.6 trillion yuan in new loans. The central bank raised yuan interest rates for the first time in nine years in October, following credit curbs targeting heated sectors including property, steel and cement.

Source: Shenzhen Daily-Agencies