(Yicai Global) Jan. 11 -- China's monetary policy is expected to remain steady and accommodative for widening credit this year after corporate loans picked up last month following easing regulation for financial institutions.

As the economy recovers from the Covid-19 pandemic, credit indicators will further pick up, and new loans are predicted to reach more than CNY2.2 trillion (USD324.8 billion) in 2023, up by about 10 percent, Wen Bin, chief economist at China Minsheng Bank, said to Yicai Global recently.

Last month, China added CNY1.4 trillion in new loans, up CNY190 billion (USD2.8 billion) from November and an increase of CNY266.5 billion (USD39.3 billion) from a year ago, according to data released by the People's Bank of China yesterday. Some CNY1.26 trillion of the total was corporate loans, up by CNY601.7 billion from a year earlier.

To support economic recovery, the central bank cut the reserve requirement ratio for financial institutions by 25 bips on Dec. 5, releasing long-term liquidity of about CNY500 billion. The policy prompted a significant increase in long-term corporate loans but credit demand for residential housing remained weak in the short term due to the pandemic and the dull property market, noted Zhou Maohua, a macro-economy researcher at Everbright Bank.

Still, companies were issuing fewer bonds in December so new social financing, an indicator of financing to the real economy, slid to CNY1.31 trillion from CNY2.36 trillion a year ago, based on data from the PBOC. For the whole year of 2022, China's new social financing amounted to CNY32 trillion (USD4.72 trillion), an increase of CNY668.9 billion from 2021. New yuan-denominated loans tallied CNY21.3 trillion, an increase of CNY1.4 trillion.

Editor: Emmi Laine, Xiao Yi