China's bank lending grows in May

Shanghai - China's bank lending rose in May from the previous month, the central bank said Thursday, as the government activates a "mini-stimulus" to spur economic growth.

New yuan loans extended by domestic banks hit 870.8bn yuan ($143bn) in May, up from 774.7bn yuan in April, the People's Bank of China (PBoC) said in a statement.

The May figure was also higher than the 733.3bn yuan forecast by a Wall Street Journal poll of 15 economists.

But total social financing - a broader measure of credit - was 1.40 trillion yuan in May, down from 1.55 trillion yuan in April, the central bank said.

"Although government efforts have helped stabilise credit growth, policymakers have so far avoided an across-the-board loosening," Capital Economics said in a research note.

Premier Li Keqiang said Tuesday that China will be more "targeted" in macroeconomic regulation and "fine-tune" policies to achieve its 7.5% growth target this year.

The comments followed an announcement by the central bank that it will lower the amount of money that some rural banks and commercial lenders must hold in reserve from next week to help kick-start the economy.

"They are directing more credit to more vulnerable parts of the economy... while continuing to tackle the build up of credit risks elsewhere, particularly in the shadow banking system," Capital Economics said.

Shadow banking in China encompasses a huge network of lending outside formal channels and beyond the reach of regulators, including activities by online finance platforms, credit guarantee companies and microcredit firms.

China's financial markets were rocked by several debt default cases earlier this year, which triggered tighter credit.