BEIJING, Aug 7 (Xinhua): The People's Bank of China (PBoC), China's central bank, is likely to lift additional credit quota for this year by five per cent over the objective set at the year beginning, according to banking officials.
This means as much as 200 billion yuan worth of additional loans will be put on the market in the rest of the year. The loans are mainly granted to domestic small and medium-sized enterprises (SMEs) as well as agricultural sector to help them tide over difficulties owing to earlier stringent monetary policy.
Although the central bank had not announced the credit quota for 2008, statistics indicate that the bank actually exerted strict control over the loan quota with 2.4525 trillion yuan worth of newly- added RMB loans for the first half of this year, or 408.8 billion yuan per month on average.
The credit expansion level for the latest five months were basically equal to or lower than that in the same period last year except sharp year-on-year rise in the first month.
The country's high-level government department calls for keeping a fast and stable economic growth, expanding internal demand, the consumer demands in particular, as well as helping SMEs to overcome operational difficulties after intensive research and investigation.
Goldman Sachs reckoned that a relaxed policy will be determined by whether China can drag down the overall CPI growth to around five per cent without price limiting measures.
The investment bank estimated that a 0.6-percentage-point increase in newly added loans will raise the net profits after tax (NAPT) of Chinese lenders by one percent over the same period of last year and help loosen the heavy cash flow pressures on SMEs.
Besides, the bank proposed that competent authorities should make efforts to ensure that it is the SMEs and agriculture area, not other enterprises or sectors, that receive the newly-added loans.
Meanwhile, the Economist Confidence Index of China slipped to 4.55 points in Q2 this year, down 0.54 point from that for Q1 and hitting the lowest level since Q1 of 2004, according to a report released by China Economic Monitoring and Analysis Centre (CEMAC).
The report, released by CEMAC, an affiliate of the National Bureau of Statistics (NBS), at a high-profile economic seminar Tuesday, points out economists have become more concerned about the economic outlook as the world economic situation worsens, export demand falls sharply and inflationary pressure lingers on.
According to the report, economists have the following judgments on China's current economic situation.
