China is targeting "moderate" loan growth for 2010 after record lending in 2009, China's central bank said Wednesday.
Many economists say this is a sign that policy makers won't allow a repeat of last year's record amount of loans.
"The control of loans in 2010 will definitely be tighter than that of 2009," said Lu Zhengwei, chief economist of the Industrial Bank.
The nation needs to maintain "relatively fast" economic growth while managing the anticipation of inflation, the central bank said in a statement.
"China is trying to cement recovery while preventing excessive liquidity in the financial system from causing resurgent inflation, asset bubbles and bad debts for banks," a Bloomberg report said.
Also, Liu Mingkang, chairman of the China Banking Regulatory Commission, has written that "structural bubbles threaten to emerge" as property prices are soaring in many Chinese cities
"There's no doubt that lending has been excessive and that explains why policy makers are starting to be more cautious about lending this year," said Qu Hongbin, chief economist for China-based HSBC Holdings Plc in Hong Kong.
He also predicted that loans in 2010 will be limited to 7 trillion yuan ($1 trillion) in 2010.
China loaned out a record 9.21 trillion yuan in the first 11 months of 2009, compared with 4.15 trillion yuan in 2008.
Premier Wen Jiabao said December 27 that China should anticipate inflation because of factors including rising global commodity costs, but added price increases would be kept within a "reasonable range."
The bank also said it will curb volatility in lending, monitor the property market and "stabilize the stock market's operations."
The country also plans to make efforts to curb the excessive rise in housing prices, and the central bank will "closely watch changes in the property market, strictly implement relevant property lending policies and promote the healthy development of property financing," according to the statement.
Housing prices in 70 Chinese cities rose 5.7 percent year-on-year in November, the fastest pace in 16 months.
The "abnormal volatility" in lending between quarters and at the end of the month also needs to be prevented, according to the bank.
