SHANGHAI, Nov 1 (Reuters) - China is no longer imposing strict limits on bank lending, as it seeks to preserve stable and relatively rapid economic growth while the financial crisis ravages the global economy, a central bank spokesman said.
The official Xinhua news agency quoted People's Bank of China spokesman Li Chao as saying on Friday that China must also flexibly adjust its economic policies, including monetary policy, and minimise the impact of the crisis on its economy, which remains relatively reliant on demand from overseas markets.
"In order to respond flexibly and effectively to the impact of the widespread international financial crisis, and maintain the Chinese economy's stable and relatively rapid growth, the central bank is no longer imposing strict limits on bank lending," Xinhua said, paraphrasing Li's comments.
His remarks were the strongest official signal yet that China is substantially relaxing bank lending guidelines as it confronts slowing growth.
Earlier this week, Wu Xiaoling, a former deputy governor of the People's Bank of China, said the central bank had stopped checking loans to small firms under lending quotas enforced this year, and might remove quarterly quotas for all lending in 2009.
The central bank strictly enforced loan controls in the first half of the year to slow credit growth and prevent the economy from boiling over.
China's GDP grew by 11.9 percent in 2007, but that rate slowed to 9.9 percent in the first three quarters of this year.
Spurred by the deepening global economic downturn and its own slowing economy, China on Wednesday announced its third interest rate cut in six weeks.
Li added that banks' reserve requirement ratios were left unchanged in the latest monetary easing because there was ample liquidity in the banking system. (Reporting by Edmund Klamann; Editing by Kim Coghill)