China ramps up bank lending to counter slowdown

China ramped up bank lending in August, according to central bank figures released Tuesday, as the government seeks to give a boost to the slowing economy. Chinese banks granted 703.9 billion yuan ($112 billion) in new loans in August, up from 540.1 billion yuan in July, the People's Bank of China said in a statement. The August figure is higher than market expectations of 600 billion yuan, according to a forecast of 13 economists surveyed by Dow Jones Newswires. Analysts said the increase in bank lending reflects China's moves to ease monetary policy with economic growth at its slowest pace in three years. "The strong new lending figure is consistent with China's earlier monetary loosening measures and its speed-up of project approvals," Zhang Zhiwei, chief China economist at Nomura Securities, told AFP. "This shows China is stepping up efforts to ease its policy. This will help the domestic economy to recover," he said. China has already cut interest rates twice this year in June and July and trimmed the amount of funds banks must place in reserve three times since last December. The government last week also unveiled a massive infrastructure package worth more than 1.0 trillion yuan, which includes 55 projects ranging from subway lines to highways. The government needs to open more funding channels for infrastructure, including allowing banks to relax controls on credit for projects, state media reported last week. But China's inflation rate accelerated slightly in August to 2.0 percent, according to figures released Sunday, which analysts said could potentially limit the government's ability to enact fresh stimulus measures. China's economy expanded 7.6 percent in the second quarter this year for its weakest performance in three years. It also marked the sixth straight quarter of slower growth.