HONG KONG — Chinese authorities signaled Wednesday that bank lending would slow significantly this year, the latest in a series of moves intended to forestall inflation and stave off bubbles in the stock and property markets.
Liu Mingkang, chairman of the China Banking Regulatory Commission, said he expected Chinese banks to extend loans totaling about 7.5 trillion renminbi ($1.1 trillion), a decline of nearly 22 percent from the record 9.6 trillion renminbi lent last year.
“This year we will continue to control the pace and demand of the credit supply,” Mr. Liu said at a conference in Hong Kong, The Associated Press reported. He added that regulators were paying special attention to loans for local government projects and real estate. All banks, he added, had been ordered to “heighten their vigilance against an impossible, embedded credit risk.”
Stock markets in China and Hong Kong fell on the news. The Shanghai composite index, the main gauge of the mainland Chinese market, ended 2.9 percent lower, while the Hang Seng index in Hong Kong dropped 1.8 percent.
Shares in Bank of China and China Construction Bank sagged 3.4 percent and 3.1 percent, respectively, in Hong Kong, while Industrial and Commercial Bank of China fell 2.6 percent.
Still, economists said the signal from Chinese policy makers was neither surprising nor drastic and showed that Beijing was “tapping on the brakes” rather than engineering a major policy reversal.
“The 7.5 trillion renminbi target for this year is hardly an insignificant amount by anyone’s definition,” said Patrick Bennett, a strategist at Société Générale in Hong Kong, adding that he believed the market reaction had been excessive.
“Bank lending has apparently been strong in the first weeks of the year,” Mr. Bennett said, “and the recent policy moves and announcements are clearly designed to deal with that at an early opportunity.”
A government stimulus package worth 4 trillion renminbi ($645 billion), coupled with the spree of easy credit as the country’s state-owned banks were told to lend freely, helped China stave off a sharp economic slowdown last year.
The easy cash has helped drive a rapid rise in China’s stock and property markets, while feeding concerns that some of the loans extended by eager banks may turn sour.
Inflation has been on the rise as the Chinese economy has picked up speed, adding to the pressure on the authorities to temper economic activity and limit price increases.
Zhu Baoliang, chief economist for the State Information Center and a senior government official, said Wednesday that consumer price inflation had accelerated “significantly” in December and was likely to average 3 percent this year, Reuters reported.
At the same time, exports, a main driver of China’s economic growth, rebounded more quickly than expected at the end of last year, giving the authorities more leeway to unwind some extraordinary stimulus measures.
In another recent action to scale back lending, the Chinese central bank ordered state-owned banks last week to set aside a bigger share of their deposits as a reserve against failed loans — 16 percent for larger banks, an increase of half a percentage point. Smaller banks’ reserve requirements were raised to 14 percent, from 13.5 percent.
The central bank raised the rate on a closely watched interbank loan this month, and it raised the rate on its one-year bills. Analysts also expect China to start gradual increases in the benchmark lending rate — a more sweeping policy tool — though that is not expected until the second half of the year.
So far, only a handful of countries, including Australia and Norway, have begun to nudge up interest rates as their recoveries have taken hold.
