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China’s bank lending in August more than doubled in the previous month, but analysts said a lot of the gain was as a result of strong mortgage demand, contributing to evidence that Chinese companies are increasingly unwilling to make new investments.

The figures, and also other data this week, paint a photo of any economy that may be improving slowly but increasingly reliant on a housing boom and government spending for growth.

Chinese banks extended 948.7 billion yuan ($142.23 billion) in 房貸 in August, well above expectations, while broad M2 money supply (M2) also grew by a more-than-expected 11.4 percent from a year earlier, based on central bank data on Wednesday.

New bank lending rebounded sharply from July’s 463.6 billion yuan, which was the smallest in 2 years, while M2 quickened from July’s 10.2 percent rise, that was the weakest in 15 months.

The central bank has pledged to maintain policy slightly loose, but sources say it can be reluctant to cut rates or bank reserves again within the near term amid evidence that companies and banks are hoarding cash as opposed to investing it.

“A renewed pick-up in credit growth last month will improve the growing sense among investors the near-term outlook for China’s economy is rather bright,” said Julian Evans-Pritchard at Capital Economics.

“Credit growth remains prone to slow over coming months since the PBOC refrains from further easing and focuses more about credit risks. But with recent activity data also strengthening, we expect economic growth to boost across the remainder of the season.”

Data on Tuesday showed China’s factory output and retail sales also grew faster than expected in August as a strong housing market plus a government infrastructure spending spree underpinned rise in the world’s second-largest economy.

But August readings also highlighted imbalances in the economy, with private investment growth at record lows and exports still sluggish.

China’s increasingly dependence on the property market is also a major concern, as increasing numbers of cities impose restrictions on home purchases in the face of sharply rising house prices, threatening to finish a near one-year rally.

A sharp price correction would add to strains on banks that are already wrestling with growing amounts of bad loans.

Household loans, mostly mortgages, accounted for 71 percent of total new bank loans in August, though these were down from a lot more than 90 percent in July, data showed.

“Mortgage loans remain the main driver of loan growth, based on booming real estate market and weak loan demand from corporates,” David Qu and Raymond Yeung at ANZ said in the note.

Outstanding yuan loans grew at 13 percent by month-end upon an annual basis.

Analysts polled by Reuters had expected new lending of 750 billion yuan, with outstanding loans seen rising 12.9 percent, and money supply seen up 10.4 percent.

Total social financing (TSF), a wide way of measuring credit and liquidity in the economy, jumped to 1.47 trillion yuan in August from 487.9 billion yuan in July.

TSF includes off-balance sheet sorts of financing which one can find away from conventional bank lending system, such as initial public offers, 房屋貸款 from trust companies and bond sales.

M1 money supply, which includes cash and short-term deposits, rose 25.3 percent in August coming from a year earlier. The widening gap between M1 and M2 growth has fueled concerns about a “liquidity trap” in dexrpky35 economy where companies remain wary of investing no matter how much stimulus money policymakers pump into the system.

“The rapid growth of M1 money supply indicates corporates’ preference of holding cash instead of investment. This is consistent with the slowing trend in fixed asset investment from the private sector,” ANZ said.

Chester Liaw, an economist at Forecast Pte Ltd in Singapore, said the spread between M1 and M2 growth narrowed to 13.9 percentage points from 15.2 recently but “remains at elevated levels.”

The PBOC is concentrating on annual M2 development of around 13 percent this year, pointing to continued accommodative policy as Beijing pledges to set about painful economic restructuring involving state-owned enterprises in key industrial sectors.

Policy insiders have claimed that evidence companies and banks are hoarding cash, alongside concerns about property market and the yuan’s stability, has reinforced policymakers’ view there is no major benefit in easing policy further.

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