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Bank lending in China hits record high in November

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Bank lending in China hits record high in November

China's banks extended 1.12 trillion yuan in net new yuan loans in November, setting a fresh record, Reuters reported Dec. 12, citing data from the central bank.

China's total lending for 2017 now stands at 12.94 trillion yuan, already surpassing 2016's total of 12.65 trillion yuan, the report said.

Zheng Lianghai, an analyst at Caitong Fund Management, said the growth in new loans was due to strong corporate financing demand as he noted the sharp rise in medium- and long-term corporate and household loans.

The jump in new loans was also due to an ongoing regulatory crackdown on off-balance-sheet lending, which forced banks to issue more formal loans, and a recent rout in China's bond markets, which made it tougher for companies to raise money by issuing bonds.

The broad M2 money supply in November grew 9.1% from 2016, picking up from 8.8% in October.

Outstanding yuan loans at the end of November grew 13.3% from 2016. Despite the surge in bank lending, analysts said the pace of broad credit expansion has been slowing due to the government's "de-risking" drive, the report said.

Hints of activity in China's unregulated shadow banking sector can also be seen in total social financing, or TSF, a measure of credit and liquidity in the economy. It rose to 1.6 trillion yuan in November from 1.04 trillion yuan in October.

TSF includes off-balance-sheet forms of financing that exist outside the conventional bank lending system, such as initial public offerings, loans from trust companies and bond sales.

As of Dec.11, US$1 was equivalent to 6.62 Chinese yuan.