China 2006 credit to grow 14-15 pc: Bank regulator

Beijing, Dec 2: Total credit growth in China this year will be between 14 per cent and 15 per cent, Chief Banking Regulator, Liu Mingkang, said on Saturday.

Annual growth in yuan loans slowed to 15.2 per cent in September and October, from more than 16 per cent in July and August, as the central bank tightened monetary policy and Liu's China Banking Regulatory Commission leaned on banks to lend less.

Liu gave the projection in passing during a speech on rural finance at a forum at Tsinghua University.

The authorities have made it a political priority to develop a ''new socialist countryside'' to narrow the town-country divide, and Liu noted that rural credit growth had expanded nearly 20 per cent this year, easily outstripping the overall growth rate.

He reaffirmed Beijing's commitment to reform the Agricultural Bank of China, the only one of the Big Four state-owned banks that has not yet been bailed out and groomed for a stock market listing.

Liu Shiyu, an assistant central bank governor, gave a similar pledge and said AgBank, which has concentrated on more profitable urban lending in recent years, should return to its roots and become the major financial provider at county level in China.

''We will continue joint-stock reform of the Agricultural Bank of China to enhance its basic market position of serving farmers, agriculture and the rural sector,'' Liu told the forum.

The government transformed the other big state banks into joint-stock companies, purged their balance sheets of bad loans, injected fresh capital, sold minority stakes to foreign strategic investors and then successfully floated them on the stock market.

But neither official offered specifics or a timetable for cleaning up AgBank, which is burdened by more than billion in non-performing loans.

REUTERS