Commentary: China's credit surge augurs no restart of massive stimulus

　　by Xinhua writers Zhang Zhengfu, Liu Fei

　　BEIJING, May 2 (Xinhua) -- Data showing an increase in loans has fanned speculation that the government may turn to a massive stimulous program, a move that would pose a risk to global financial market.

　　Upon closer inspection, however, these fears are unfounded.

　　It is normal for a country to adopt an accommodative policy to underpin a slowing economy, and China will continue to this end until the economy fully restores its strength.

　　China will not resort to large stimulus measures; policymakers are more than aware of the consequences of such a short-sighted program. Moreover, the country is still addressing the side effects of the previous stimulus package, such as overcapacity.

　　According to official data, China's new yuan loans rose to a record of 4.61 trillion yuan (about 712 billion U.S. dollars) in the first quarter, sharply up 930.1 billion yuan from a year earlier.

　　The situation is reminiscent of the credit build-up during the global financial crisis starting in 2009 when the authorities turned to credit to bolster the economy.

　　However, instead of being channeled to investment projects with short-term impact on GDP, as was the case back then, the lion's share of the current new loans ended up funding long-term programs, supporting small businesses, and facilitating consumption, such as housing.

　　This rapid increase in loans is temporary.

　　The beginning of the year saw a slew of new measures to stabilize growth and the start of numerous infrastructure projects. Recovering international commodities prices also led many firms to start replenishing their inventories.

　　These temporary, seasonal factors mean that the credit boom in the first quarter is unlikely to last long.

　　Related:

　　BEIJING, April 28 (Xinhua) -- The era of easy money seems to be drawing to a close for Chinese banks as annual results showed their bad loans piling up fast while profits slowed sharply last year.

　　All 16 lenders listed on China's A-share market have now released their annual earnings, all posting higher non-performing loans (NPLs) in 2015. Some saw bad loans jump more than 50 percent year on year.Full story

　　BEIJING, April 5 (Xinhua) -- The Chinese economy is showing signs of warming as observers eagerly await the release of first-quarter GDP data next week.

　　With fiscal and credit policy support beginning to take effect, the official purchasing managers' index for the manufacturing sector came in at 50.2 in March, up from February's 49 to its highest level since August. According to the data released on Friday, the index for non-manufacturing business activity stood at 53.8, up from 52.7 in February, reversing a downward trend since December. Full story

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　　Commentary: China's credit surge augurs no restart of massive stimulus

　　Source: Xinhua2016-05-02 13:50:59

　　by Xinhua writers Zhang Zhengfu, Liu Fei

　　BEIJING, May 2 (Xinhua) -- Data showing an increase in loans has fanned speculation that the government may turn to a massive stimulous program, a move that would pose a risk to global financial market.

　　Upon closer inspection, however, these fears are unfounded.

　　It is normal for a country to adopt an accommodative policy to underpin a slowing economy, and China will continue to this end until the economy fully restores its strength.

　　China will not resort to large stimulus measures; policymakers are more than aware of the consequences of such a short-sighted program. Moreover, the country is still addressing the side effects of the previous stimulus package, such as overcapacity.

　　According to official data, China's new yuan loans rose to a record of 4.61 trillion yuan (about 712 billion U.S. dollars) in the first quarter, sharply up 930.1 billion yuan from a year earlier.

　　The situation is reminiscent of the credit build-up during the global financial crisis starting in 2009 when the authorities turned to credit to bolster the economy.

　　However, instead of being channeled to investment projects with short-term impact on GDP, as was the case back then, the lion's share of the current new loans ended up funding long-term programs, supporting small businesses, and facilitating consumption, such as housing.

　　This rapid increase in loans is temporary.

　　The beginning of the year saw a slew of new measures to stabilize growth and the start of numerous infrastructure projects. Recovering international commodities prices also led many firms to start replenishing their inventories.

　　These temporary, seasonal factors mean that the credit boom in the first quarter is unlikely to last long.

　　Related:

　　News Analysis: Chinese banks under pressure as bad loans rise

　　BEIJING, April 28 (Xinhua) -- The era of easy money seems to be drawing to a close for Chinese banks as annual results showed their bad loans piling up fast while profits slowed sharply last year.

　　All 16 lenders listed on China's A-share market have now released their annual earnings, all posting higher non-performing loans (NPLs) in 2015. Some saw bad loans jump more than 50 percent year on year.Full story

　　China Focus: Chinese economy improving amid pro-growth measures

　　BEIJING, April 5 (Xinhua) -- The Chinese economy is showing signs of warming as observers eagerly await the release of first-quarter GDP data next week.

　　With fiscal and credit policy support beginning to take effect, the official purchasing managers' index for the manufacturing sector came in at 50.2 in March, up from February's 49 to its highest level since August. According to the data released on Friday, the index for non-manufacturing business activity stood at 53.8, up from 52.7 in February, reversing a downward trend since December. Full story