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China to Open up More Credit Lines for Small Businesses

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A Chinese official has said China's banking regulator would open up more credit lines for small enterprises this year despite the recent government clamp-down on excessive lending.

The remark was made Tuesday by Xiao Yuanqi, chief of the banking supervision department II of China Banking Regulatory Commission, according to Wednesday's China Daily.

"Commercial lenders should ensure that the amount of new loans they advance to small enterprises this year exceeds that of last year, and the pace of such loan growth in 2010 must be faster than the average level of credit growth in the previous year," Xiao was quoted as saying.

Xiao also said the requirement was mandatory, warning lenders could face market access restrictions or differentiated supervision if they fail to adhere to the call.

The remarks come close on the heels of steps taken since the start of the year by the authorities to curb lending and prevent asset bubble risks, the newspaper commented.

"We are drafting new supervision rules governing banks' small enterprise business and these are likely to come out later this year," said Xiao.

(Xinhua News Agency February 24, 2010)