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China Bank Lending Declines In May

China's bank lending declined but credit growth improved in May, data from the People's Bank of China showed Tuesday.

Bank lending decreased to CNY 1.48 trillion from CNY 1.7 trillion in April.

The broad measure of money supply, M2, climbed 11.1 percent annually at the end of May, the same rate as seen in April.

Meanwhile, total social financing, a broad measure of credit and liquidity in the economy, totaled CNY 3.19 trillion in May compared to CNY 3.09 trillion a month ago.

The acceleration in credit growth has further to run and will add fuel to the economic recovery, Julian Evans-Pritchard, an economist at Capital Economics, said.

At the annual session of the National People's Congress last month, Premier Li Keqiang said the monetary policy will be more flexible and the country will use a variety of tools including reserve requirement ratio cuts and interest rate reductions to enable M2 money supply and aggregate financing to rise at higher rates this year.

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