BEIJING, Feb. 12 (Xinhua) -- Bank loans made in China in January amounted to 1.62 trillion yuan (237.19 billion U.S. dollars), an increase of 814.1 billion yuan, or 103.6 percent, from 2008's same month, the People's Bank of China, the central bank, said Thursday.
Boosted by China's ambitious economic stimulus plan, credit has been robust since late last year. Loans made nationwide stood at 771.8 billion yuan in December, up by 723.3 billion yuan from a year earlier.
Data released by the central bank shows outstanding local currency loans were up 21.33 percent to 31.99 trillion yuan at the end of January. The growth rate was 2.6 percentage points higher than the end of 2008.
China's banks tended to loosen credit for large, potentially lucrative projects at the beginning of the year, said Guo Tianyong,an expert of banking at the Central University of Finance and Economics.
In the past five years, loans released in January have usually amounted to 12 to 18 percent of the annual lending.
Analysts with Morgan Stanley said a significant part of credit expansion reflected pent-up demand for short-term working capital, which was created by tight credit controls in the first half of 2008.
GDP growth dropped to 6.8 percent in the fourth quarter last year, bringing the annual growth to 9 percent, the lowest in seven years. The government in November announced a 4-trillion-yuan stimulus package for the next two years.
A report released by the Industrial and Commercial Bank of China (ICBC), China's largest bank, said ICBC's loans increased by117.1 billion yuan in January, with 69.3 billion yuan going to national key projects, including construction of power facilities, railways and roads. Loans to national projects for January account for nearly 60 percent of the total.
Banks were still cautious about loans to private sector and to small and medium-sized enterprises (SMEs), said Liu Yuhui, researcher at the Institute of Finance and Banking of the Chinese Academy of Social Sciences.
Through January, the narrow measure of money supply, M1 (cash in circulation plus corporate current deposits), was up 6.68 percent to 16.52 trillion yuan from a year earlier. The growth rate was 2.38 percentage points lower than the end of 2008, according to the central bank.
According to the central bank, bill financing increased by 623.9 billion yuan in January, accounting for 40 percent of the total credit increase. The figure had been around 5 percent in the past two years.
The sharp rise of bill financing reflected that money did not necessarily go into the real economy, said Guo Tianyong.
Lian Ping, chief economist of the Bank of Communications, said the launch of a series of national infrastructure projects would provide impetus to all industrial sectors, including SMEs in time.
Through January, the M2 -- a broad measure of money supply, which covers cash in circulation plus all deposits -- grew by 18.79 percent from a year earlier to 49.61 trillion yuan.
The M2 growth rate was 0.97 percentage points higher than the previous month. The growth rate for December was 3.02 percentage points above that of the previous month, after the figure fell for six consecutive months.
The government had cut interest rates five times and reduced the deposit reserve ratio four times since September 2008.
The outstanding amount of M0, or cash in circulation, hit 4.11 trillion yuan, up 12.02 percent from the same point last year.
According to the central bank, outstanding local-currency deposits through January were up 22.98 percent to 48.16 trillion yuan, 3.25 percentage points higher than the end of last year.
Deposits in January alone increased by 1.51 trillion yuan, 1.28trillion yuan more than the same month of 2008.
"People and enterprises are still unwilling to spend because of lower confidence over the future economic situation," said Liu Yuhui.
