China's money supply and borrowings expanded rapidly again last month but the growth momentum weakened slightly, the central bank said Thursday.

The outstanding value of M2, the broad measure of money supply, rose 19.1 percent year-on-year to 23.36 trillion yuan (US$2.81 trillion) at the end of April, said the People's Bank of China.

The rise was almost equivalent to the 19.2 percent rise in March.

Also yesterday, the National Bureau of Statistics reported that industrial production rose 19.1 percent in April over a year earlier, down from a 23.2 percent annual growth rate in February.

That was the third straight month of lower growth. Growth in output of crude steel, cement and autos declined in April compared with March, while production of coal and power - areas suffering shortages - were slightly higher, the bureau said.

"The money supply still grew at high levels," the bank said in a statement.

China has targeted a 17 percent increase of broad and narrow money supply in 2004 and domestic financial institutions have been told to limit new loans to a combined total of 2.6 trillion yuan for the year.

The outstanding value of all loans rose 20.4 percent to 18.12 trillion yuan at the end of April from a year earlier. The rate was lower than the 20.66 percent growth in March.

The central bank favors a mild reduction of lending growth to ward off a credit-driven overheating economy. Most domestic commercial banks have already rolled out stringent lending rules.

Bank of China recently announced an 11-article guideline on controlling lending risks, under which only the bank's headquarters and provincial branches are qualified to approve new credit lines.

The big-four banks said recently that they will restrict lending to the overheating industries of cement, aluminum, real estate and steel, a move that is in line with the central bank's demand.

(eastday.com May 14, 2004)