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BEIJING, Feb. 13 -- Chinese banks issued 1.62 trillion yuan (7 billion) in new loans in January, up 101 percent year-on-year, prompting some economists to say the government might not cut interest rates for the time being to boost the economy. The massive jump in lending is equal to about one-third of the loans issued in the whole of 2008, a year that began on a generally tight credit line, the central bank said yesterday. M2, which includes cash and all types of deposits and indicates overall liquidity in the financial system, grew in January, too, by 18.8 percent year-on-year. It increased 17.8 percent in December. The massive growth in lending comes at a time when banks are rushing to cherry-pick the juiciest stimulus-package projects, especially major infrastructure ones that need long-term investment, the economists said. Chinese banks issued 1.62 trillion yuan (7 billion) in new loans in January, up 101 percent year-on-year The government announced a 6-billion package on November 9 to boost domestic demand and shore up investment. Though the central government will shoulder one-third of the cost, banks will play an important role in financing the construction of bridges, railways and highways. "The banks are fighting for the best projects in the government's stimulus package," said Ha Jiming, chief economist of China International Capital Corp. "It's not surprising to see that an array of the deals were sealed in the past month." "The massive lending growth minimizes the need to further cut interest rates heftily," said Lian Ping, chief economist with Bank of Communications. "The liquidity problem should ease with such a growth." The central bank has cut the benchmark lending rate by 2.16 percentage points in the past four months and reduced the deposit reserve requirement ratio in order to ensure there's enough liquidity in the market to boost the economy. The growth in lending could also prove to be a blessing for cash-strapped domestic enterprises trying to stay afloat amid shrinking overseas demand and waning consumer confidence. Central bank figures show bill financing, which supplies working capital, accounted for 39 percent of the new loans. Medium and long-term corporate loans made up 32 percent. "It (growth) reduces the default risks of domestic firms, which in turn eases worries over bank asset quality at least in the short term," said Sun Mingchun, an economist with Nomura International. The economists said the dramatic rise in lending could be partly attributed to pent-up demand for loans last year. The central bank had imposed a curb on lending till November last year to combat inflation and prevent the economy from overheating. That left "many firms, especially small- and medium-sized ones, facing a severe cash flow problem", Sun said. Policymakers lifted the curb in November and raised the target for M2 growth to 17 percent for 2009, up from 16 percent that had been in practice since 2006. The move is expected to ensure there's enough liquidity in the market to spur investment and boost the economy, whose growth dropped to a seven-year low of 6.8 percent in the fourth quarter last year. "Credit expansion in the first quarter of this year is expected to be very high because banks can maximize investment returns by front-loading new loans," said Jing Ulrich, managing director and chairwoman of China Equities at JP Morgan. But Ulrich cautioned against a possible rise in credit risk because the increase in liquidity could cause a sharp rise in banks' non-performing loans.
BEIJING, April 13 (Xinhua) -- House prices in 70 major Chinese cities fell 1.3 percent in March from a year earlier, the National Bureau of Statistics said Monday. The month-on-month figure, however, rose 0.2 percent in March. In the first quarter, the area of commercial houses sold rose 8.2 percent to 113 million square meters and sales jumped 23.1 percent to 505.9 billion yuan (74 billion U.S. dollars), the NBS said. Prices of new houses fell 1.9 percent year-on-year last month but rose 0.1 percent from February. Prices for second-hand houses rose 0.3 percent month-on-month despite of a decline of 0.4 percent from a year earlier. Analysts warned it was still too early to say the property market had revived, as sales were mainly driven by surging credit and by stimulus policies, such as tax cuts. Other indicators, such as land purchases by developers, had shown no signs of recovery. Floor areas of newly built houses in the first quarter tumbled 16.2 percent to 201 million sq m. The decline was 1.4 percentage points more than the January-February figure. Land purchased for homebuilding fell more than 40 percent in the first quarter to 47.42 million sq m, and the actual area developed shrank 11.3 percent to 52.2 million sq m. China Vanke, the country's biggest property developer by market value, reported on April 11 its first-quarter sales rose 21 percent to 12.22 billion yuan. Those of Poly Real Estate Group, the second-biggest, doubled to 6.48 billion yuan.
SANMEN, Zhejiang, April 19 (Xinhua) -- China on Sunday started the construction of its first third-generation pressurized water reactors using AP 1000 technologies developed by U.S.-based Westinghouse. The reactors, located in Sanmen of east China's Zhejiang Province, will also be the first in the world using such technologies. The Sanmen Nuclear Power Plant will be built in three phases, with an investment of more than 40 billion yuan (5.88 billion U.S. dollars) injected in the first phase. The first phase project will include two units each with a generating capacity of 1.25 million kw. Photo taken on April 18, 2009 shows the foundational construction site of the No.1 unit of the first phase of the Sanmen nuclear plant in Zhejiang Province. The Sanmen nuclear plant, with the world's first nuclear plant using the AP1000 technologies, a type of third generation nuclear power reactor introduced by America's Westinghouse company, started the construction recently The first generating unit will be put into operation in 2013, and the second, in 2014. The plant will eventually have six such units. "It is the biggest energy cooperation project between China andthe United States," said Zhang Guobao, vice minister in charge of the National Development and Reform Commission and also head of the National Energy Administration. "It will contribute to the human kind's peaceful use of nuclear power," he said. China launched bidding in 2003 for its nuclear power stations of the third generation. Foreign companies including Westinghouse, France's Areva and Russia's AtomStroy Export are major bidders. Photo taken on April 18, 2009 shows the foundational construction site of the No.1 unit of the first phase of the Sanmen nuclear plant in Zhejiang Province. The Sanmen nuclear plant, with the world's first nuclear plant using the AP1000 technologies, a type of third generation nuclear power reactor introduced by America's Westinghouse company, started the construction recentlyWestinghouse became the winner after China signed a memo with the United States on the introduction and transfer of third-generation nuclear power technologies in December 2006. The final agreement was inked between China's State Nuclear Power Technology Corporation and Westinghouse in July 2007, according to which China will buy four third-generation pressurized water reactors from Westinghouse. The agreement also involves technology transfer to China. Two of the four pressurized water reactors will be installed in Sanmen of Zhejiang Province and two in Haiyang City, eastern Shandong Province. William Poirier, vice president of Nuclear Power Plants China of Westinghouse Electric Company, said China has a sound nuclear power security system with a strict supervision work. He said he believed China can replicate the experiences of the third-generation nuclear power technologies and build more such stations. China's mainland has 11 nuclear reactors at six plants, all on the east coast, with a combined installed capacity of 9.07 million kw. To meet its fast economic growth, China plans to develop more nuclear power. The country plans to have 40 million kw of installed nuclear capacity on its mainland by 2020, which would be4 percent of projected electricity supply capacity, or double the current level. Of the 11 reactors, three use domestic technologies, two are equipped with Russian technology and four with French technologies, and two are Canadian designed. All the 11 reactors employ second-generation nuclear power technologies. Speaking at Sunday's inauguration ceremony of the first-phase project of the Sanmen Nuclear Power Plant, Chinese Vice Premier Li Keqiang urged making more efforts to develop new energy to ensure the country's energy security and boost economic growth. He underscored innovation as the key to nuclear power development, calling for enterprises to adopt advanced technology and enhance self-innovation. He said it was inevitable that China would need to improve energy structure and enhance energy conservation and emission cuts when resources and environment issues took their toll on economic development.
BEIJING, Feb. 8 (Xinhua) -- Irrigation has covered 52.7 percent of the wheat farmland in drought-hit provinces in China by Saturday, said the Ministry of Agriculture. A total of 85 million mu (about 5.67 hectares) of wheat land have been irrigated in eight drought-stricken provincial regions, the ministry told a meeting on Sunday. Minister Sun Zhengcai said it is of importance to fully use machines in the fight against drought. People irrigate a wheat field in Laocheng Township of Changge County, central China's Henan Province, Feb. 3, 2009. Henan, one of China's key wheat producing regions, has suffered from drought since Oct. 24, 2008. Some 2.9 million hectares of farmland in Henan were affected He asked local governments to increase subsidies for farmers to buy more irrigation-related and water-saving equipments, and make every effort to expand the irrigation coverage and save water. By Saturday, 152 million mu of wheat farmland, which accounted for 95 percent of the drought-stricken crops in China, was affected in eight provincial regions including Hebei, Shanxi, Anhui, Jiangsu, Henan, Shandong, Shaanxi and Gansu. Rain and snow from Friday to Sunday in the southeastern part of northwest China and the southwestern part of north China has reduced the area of drought-affected farmland by 20 million mu. China experienced the most severe drought for decades. As of Saturday, 299 million mu of crops, 4.42 million people and 2.2 million heads of livestock were affected. The crops affected was 110 million mu more than the average level during the same period in past years. During a visit to central China's drought-hit Henan Province on Saturday and Sunday, Chinese Premier Wen Jiabao has urged officials in drought-hit areas to place "top priority" on relief work as agricultural stability concerns China's bid to revive its economy. China has declared the highest level of emergency in response to the drought, employing artificial means to induce rains and allocating 86.7 billion yuan (about 12.69 billion U.S. dollars) as subsidies to farmers. In addition, the central government has decided to earmark 400 million yuan to local governments for drought relief.