China's banks lent more slowly than markets expected in November while the pace of total financing eased, but analysts said the economy remains on track for a modest recovery due to accommodative polices.
Chinese banks extended 522.9 billion yuan ($83.73 billion) of new local currency loans in November, the central bank said on Tuesday, missing market expectations of 550 billion yuan.
The November new loan data - released on the People's Bank of China on its website www.pbc.gov.cn - implies total lending is on course to exceed 8.5 trillion yuan in 2012, up from 7.47 trillion in 2011.
China's top leaders have pledged to continue policy fine-tuning in 2013 to ensure stable economic growth.
"We think the monetary policy is still loose, and (authorities) will maintain the current loose stance for the next several months. That is strong enough to keep the economic recovery on track," said Zhang Zhiwei, China economist at Nomura in Hong Kong.
"We don't think the government needs to cut interest rates. Most likely they will just keep the ongoing credit loosening."
The modest credit data followed data on Monday that showed exports growth slowed sharply to a much lower than expected 2.9 percent in November, underscoring the global headwinds dragging on an economy which is showing otherwise solid signs of a pick up in domestic activity.
Data at the weekend showed both industrial output and retail sales rose in November at their fastest annual pace in eight months, reinforcing the view that growth in the world's second-biggest economy is finally picking up after a long slide.
China's annual economic growth dipped to 7.4 percent in the third quarter, its weakest pace since the first quarter of 2009 when China was reeling from the global financial crisis.
Growth is expected to pick up in the fourth quarter following a raft of measures, including two interest rate cuts this year, reductions in bank reserve requirements and faster approvals for infrastructure projects.
China's total social financing aggregate, a broad measure of liquidity in the economy, stood at 1.14 trillion yuan in November, down from 1.29 trillion yuan in October, the People's Bank of China said.
Total social financing, which covers bank loans, trust loans, bank acceptance bills, corporate bonds and equity financing, is likely to hit a record high this year.
China's central bank is watching its overall social financing aggregate more closely than bank loans as it steers policy and moves ahead with market-based interest rate reforms, a senior central bank official said in November.
New yuan bank loans accounted for only 58.2 percent of the country's total financial aggregate in 2011.
"The new loans figure holds less importance in China's social financing than it used to, so that's not much of a miss. We're still on track for the central bank's target for the full year," said Jacqueline Rong, economist at BNP Paribas in Beijing.
"The total social financing figure, although slightly lower than last month, is still higher than last year. That shows we're still on an accommodative footing."
The PBOC cut interest rates in June and July and has lowered required reserve ratios (RRR) three times since late 2011 to free an estimated 1.2 trillion yuan ($190 billion) for lending as part of a year-long programme of policy fine-tuning.
It has since held off on more aggressive easing, opting instead to pump short-term cash into money markets to ease credit strains, a move analysts say reflects Beijing's concerns about renewed property and inflation risks.