Limits on bank lending cut to maintain stable growth

Shanghai: China is no longer imposing strict limits on bank lending, as it seeks to preserve stable and relatively rapid econ-omic growth while the financial crisis ravages the global economy, a central bank spokesman said.

The official Xinhua news agency quoted People's Bank of China spokesman Li Chao as saying on Friday that China must also flexibly adjust its economic policies.

This includes monetary policy, and minimise the impact of the crisis on its economy, which remains relatively reliant on demand from overseas markets.

"In order to respond flexibly and effectively to the impact of the widespread international financial crisis, and maintain the Chin-ese economy's stable and relatively rapid growth, the central bank is no longer imposing strict limits on bank lending," Xinhua said, paraphrasing Li's comments.

Relaxing

His remarks were the strongest official signal yet that China is substantially relaxing bank lending guidelines as it confronts slowing growth.

Last week, Wu Xiaoling, a former deputy governor of the People's Bank of China, said the central bank had stopped checking loans to small firms under lending quotas enforced this year.

He said it might remove quarterly quotas for all lending in 2009.