China’s bank lending rose 16 percent in June from the previous month, central bank figures showed Thursday, in a sign government efforts to spur the country’s slowing economy may be working.
Chinese banks made 919.8 billion yuan ($144.3 billion) in new loans, up from 793.2 billion yuan in May, the People’s Bank of China said in a statement.
The government last week cut interest rates for the second time in a month. It has also cut reserve requirements – the amount of money banks must hold in reserve – three times since December last year.
Mark Williams, chief Asia economist at Capital Economics, said the gain in June was “significantly higher” compared with May.
“That suggests that government attempts to revive bank lending were starting to work, even before last week’s rate move,” he said in a report.
Recent weak data, including trade figures announced this week, have raised concerns about the health of the world’s second-largest economy. Premier Wen Jiabao has said that the government needs to take more steps to bolster growth.
China’s economy grew 8.1 percent in the first three months of this year, its slowest pace in almost three years. The government is due to announce second-quarter gross domestic product figures Friday.
For the six months from January through June, Chinese banks made 4.86 trillion yuan in new loans, the central bank said, up 16.5 percent from the same period last year.
The central bank also announced that China’s foreign exchange reserves – the world’s largest – stood at $3.24 trillion at the end of June, down slightly from $3.31 trillion at the end of March.
The central bank announces foreign exchange reserve figures on a quarterly basis.