China’s Credit Growth Slows

China’s broadest measure of new credit fell in December while money-supply growth and new yuan loans trailed estimates amid a cash crunch and government efforts to curb speculative lending.

Aggregate financing was 1.23 trillion yuan ($204 billion), the People’s Bank of China said today in Beijing. That compared with 1.63 trillion yuan a year earlier. China’s foreign-exchange reserves, the world’s largest, rose to a record $3.82 trillion at the end of December from September’s $3.66 trillion.

A record decline in new credit in the second half signals limits on the pace of economic expansion this year as policy makers focus on controlling financial risks and implementing the broadest reforms since the 1990s. The jump in reserves highlights China’s challenge in coping with capital inflows while trying to reduce intervention in the currency.


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