The Chinese government has raised lending quotas for foreign banks operating and another decision made by the authority to support economic development amid slowing demand for exports in the country, according to state media on Friday.

As the decision, incorporated foreign banks are allowed to apply for higher lending quotas locally for this year, but the Shanghai Securities News reported, mentioned unnamed sources that the range of increase has not been finalized by the administration.

The report talked about that they were proposed to direct the additional loans towards small, medium-sized enterprises, agricultural sector as well as firms involved in reconstruction and restoration program in Sichuan province, which was damaged by a devastating earthquake in May 2008. The report did not present details about the sum of new loans policy, for the foreign banks were initially allowed to expand this year.

On the other hand, State media said earlier that Chinese central bank had increased national banks’ lending quotas for this year by 5% at the time when local commercial banks’ yearly quota for new loans was increased by 10%. The previous upper limit in new Yuan loans was usually understood to be no more than the 3.63 trillion Yuan or $739 billion lent in the year 2007.

According to the official figures, fourth biggest economy of the world increased 10.4 % in the first half and 10.1% in the second quarter of the year and down from the sizzling pace of 11.9% recorded for all of 2007.

Recent declarations from the top-level policy-makers have recommended a subtle shift in Chinese lending policy away from preventing financial overheating toward growth creation. Now wait and see how the new policy can contribute to developed Chinese economy.

Be Sociable, Share!

• 

Related posts:

1. Can the UAE Maintain its Financial System?
2. Small Business will be Financed
3. Bank of America Reports – Profit Drops and Capital Raise