China bank lending soars to top 1 trillion yuan (by V. Phani Kumar)

HONG KONG (MarketWatch) -- Chinese banks made more than a trillion yuan in new loans in March to trounce market expectations, according to central bank data issued on Thursday. Mainland lenders lent 1.01 trillion yuan ($160.1 billion) during the month, 332 billion yuan more than they did in the same month a year earlier, and also substantially above the 800 billion yuan of credit expected in a Reuters survey. Analysts closely monitor China's monthly bank lending, as regulators are believed to watch and control loan disbursals to steer the economy. The PBoC also said China's foreign exchange reserves climbed to $3.31 trillion at the end of March. "Today's data mean that the chance of rate cut is very small in the near future," said Bank of America Merrill Lynch economist Ting Lu in comments emailed to clients. He said the lending data suggested "loan demand came back after banks cut lending rates, new investment projects got started and the coldest winter in 27 years [is] behind us."

World Bank cuts China 2012 growth forecast (by Chris Oliver)

HONG KONG (MarketWatch) -- The World Bank on Thursday cut its 2012 China growth forecast to 8.2%, lowering its outlook from January's 8.4% estimate. It said a gradual slowdown was unfolding amid a sharp deceleration in investment growth, softening consumption growth and weak global demand. In its quarterly update report the World Bank said China should guard against a hard landing through fiscal policies designed to support consumption. The Washington-based agency said cutting banks' reserve requirements would be one way to ease credit availability. However, it also said that China's central bank should resist cutting interest rates for the time being, and instead hold such policy actions in reserve in case of a sharper downturn, It noted that real interest rates in China were already accommodative. Among risk factors, the World Bank cited China's housing market downturn and disruptions to growth in Europe and other high-income economies.