Yuan loans hit low for year in October (3)

"This is half of the peak level reached in late 2009, but already twice the speed of nominal GDP growth," Yao said. "Having learned its previous lessons, the PBOC may start taking into consideration the possible effects of monetary easing on domestic inflation even more down the road.

Zhu Haibin, chief economist in China with JPMorgan Chase & Co, said, "it is worth noting that the notable increase seen in non-bank lending since August this year, in particular trust loans, as well as corporate bond financing, appears to be consistent with the increasing number of public investments being made into infrastructure, railways, environmental protection and clean energy."

Chang estimated the total amount of new financing issued in China is on track to reach a new record of 15 trillion yuan this year, up from the previous peak of 14 trillion yuan, which was set in 2010.

With economic growth expected to accelerate but inflation also expected to pick up toward the end of the year, the likelihood of seeing further interest rate cuts in 2012 is diminishing, Zhu said.

"We expect the central bank will hold interest rates at their current levels in 2013," he said.

Zhu said that one more cut of 50 basis points will probably be made to the reserve requirement ratio this year.

wangxiaotian@chinadaily.com.cn

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