The conference set a new yuan-lending target throughout 2013 at 8.5 trillion yuan ($1.37 trillion), while M2 — a broad measure of money supply that covers cash in circulation and all deposits — is targeted to grow by 13 percent year-on-year, the Beijing-based China Securities Journal reported on Friday, citing anonymous sources.
In 2012, when economic growth slowed for the seventh consecutive quarter, new yuan lending stood at 8.2 trillion yuan with a M2 year-on-year increase of 13.8 percent.
"If the 8.5 trillion yuan plan is strictly implemented, unless bond issuance expands excessively, the capital will not match the investment demand in 2013," said Guo Lei, senior analyst at Zheshang Securities.
The ideal scenario for this year would be making monetary policy more flexible, such as lowering the reserve requirement for commercial lenders in a timely way, added Liu Yuhui, director of the financial lab at the Chinese Academy of Social Sciences.
Chang Jian, China economist with Barclays Bank, said the PBOC's prudence in 2013 is related to its expectation of lower potential growth in China and concern about medium-term inflation and asset-bubble risks.
Part of the PBOC's caution on monetary easing is also likely related to the rapid expansion in non-bank financing in the second half of last year, she said.
The strong total financing, which includes loans, bond issuance and stock sales, would provide some comfort with regard to the growth recovery, but risks are piling up, Chang said.
Feedback
RSS
