The balance of loans provided by financial institutions in China had hit 15.89 trillion yuan by the end of June this year, up 22.9 per cent year-on-year; the balance of broad money M2 had hit 20.49 trillion yuan, up 20.8 per cent, the highest since 1996 and August 1997.
Experts, at the Research Institute of the Development Research Centre under the State Council, attributed this rapid growth to the following four causes:
Fast development of the national economy has provided the incentives to great loan demand. China's GDP grew 9.9 per cent in the first quarter. In April and May, the SARS epidemic exerted some negative impact on the economy, but some of the delayed consumption is expected to be released in the second half. In the first five months of this year, investment continued to rise, with the fixed assets investment growing by a record 31.7 per cent. Imports and exports grew almost 40 per cent. All these fuelled the growth of loans;
