Chinese banks issued 532.8 billion yuan ($78.8 billion) in new loans in July, the central bank said Wednesday, as Beijing maintained its curbs on lending to avoid overheating in the economy. New lending for July represented a measured slowdown from June, when banks issued 603.4 billion yuan in new loans, according to figures posted on the website of the People's Bank of China. M2, the broadest measure of money supply, which includes cash and money in savings accounts, rose 17.6 percent at the end of July from a year earlier, lower than the 18.5 percent increase at the end of June. China has powered out of the global financial crisis on the back of a four-trillion-yuan stimulus package and state-sanctioned bank lending that saw loans nearly double to 9.6 trillion yuan in 2009. But worried about a potential rise in bad loans and inflation, the government has clamped down on lending and has set a loan target of 7.5 trillion yuan for this year, a 22 percent drop from last year. Meanwhile, China's inflation spiked up in July amid heavy flooding that disrupted food supplies, adding to pressure on the government to control rising living costs as rapid economic growth slows. Consumer prices rose 3.3 percent over a year earlier, the National Bureau of Statistics reported. It was the highest level this year and well above the government's official annual target of 3 percent. The rise was driven by a 6.8 percent jump in food costs amid flooding across farm areas that has disrupted food supplies. The jump in inflation adds to pressure on communist authorities to ease an increase in the cost of living. Beijing has clamped down on bank lending to cool double-digit increases in housing costs.
