China Must Contain Bank Lending, PBOC Adviser Writes in Daily
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China must contain bank lending, keep the yuan’s exchange rate flexible and provide “guidance” for the property market to help ensure “smoother functioning” of the economy, Xia Bin, an adviser to the central bank and director of the Finance Institute at the Development Research Center of the State Council, wrote in a commentary published in today’s China Daily newspaper.
The People’s Bank of China set a cap of 7.5 trilion yuan for new bank lending this year, which “must be strictly adhered to,” Xia wrote. Tighter controls on lending has led to “cooperation” between banks and trust companies, with more strict supervision needed for these “undesirable” relationships, Xia wrote.