Hong Kong - Yonhap
Chinese banks\' loan growth is expected to lose steam this year as the Chinese authorities are pressing them to cut back on lending in a bid to tame inflation, a report said Friday. New bank loans in China will likely reach between 7 trillion yuan (US$1.06 trillion) and 7.5 trillion yuan for all of this year, compared to 7.95 trillion yuan last year, according to the report by the Bank of Communications, one of leading commercial banks in China. As China faces rising inflation, the People\'s Bank of China, the central bank, has been seeking to absorb liquidity in the market and curb credit growth. Commercial banks are required to report loan-to-deposit ratios on a daily basis starting from June and face quarter-end assessment pressure. In the first six months of this year, China\'s new credit lending was estimated at 4 trillion yuan, which was slightly lower than expected. Commercial banks in China usually lent 60 percent of the total new loans target in the first half and 40 percent in the second half. In the July-December period, loans are expected to reach around 2-3 trillion yuan. China\'s central bank did not give a specific credit growth target for this year. Last year, its target was 7.5 trillion yuan. China\'s consumer prices are estimated to have grown more than 6 percent in June, the highest level in 35 months, due largely to soaring food prices. The official figure is scheduled to be released later this month. The world\'s second-largest economy has started to roll back the stimulus package it introduced at the end of 2008 amid the global financial crisis. Its high inflation was triggered by excessive liquidity and an overheated economy.