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Hot Topic: Bank of China Aims to Continue Lending Expansion

Bank of China Ltd. which funded most loans among Chinese banks in the first half of this year plans to keep expanding credit unless the government clamps down on the nation’s record lending boom.  The nation’s third-largest bank will maintain its original target of generating about 10 percent of China’s new loans in 2009, Beijing-based spokesman Wang Zhaowen said by telephone yesterday. Bank of China may “fine tune” its strategy in line with any government policy changes, he said.  Bank of China advanced a record 902 billion Yuan (US$132B) of loans in the first half, leading a credit explosion that drove stocks and property prices higher and helped spur an economic recovery. The lending spree, encouraged by the government, has fanned concerns that asset bubbles will form and bad loans will rise, and the bank regulator yesterday called on lenders to control the flow of credit.