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China's Bank Lending Rises In May

China's bank lending increased in May, figures from the People's Bank of China showed Wednesday.

Banks extended CNY 1.18 trillion new loans in May compared to CNY 1.02 trillion in April. However, this was below the forecast of CNY 1.3 trillion.

Total social financing, a broad measure of credit and liquidity, increased to CNY 1.4 trillion from CNY 1.36 trillion in April.

Broad money supply M2 climbed 8.5 percent year-on-year in May, the same rate as seen in April. Economists had forecast an increase of 8.6 percent.

Policy easing has not yet been effective in generating a sustained pick-up in credit growth and is one of the reasons why a strong recovery in economic growth in the coming months is not expected, Franziska Palmas, an economist at Capital Economics, said.

Elsewhere, data from the China Association of Automobile Manufacturers showed that car sales declined 16.4 percent from a year ago to 1.91 million. This was the eleventh straight month of decrease in sales.

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