The assets and liabilities of China's financial institutions rose rapidly last year as deposits and loans expanded to fuel the nation's robust economic growth.

The China Banking Regulatory Commission (CBRC) said Tuesday that the total assets of financial institutions, including foreign ones operating in the country, grew by 16.8 percent on a year-on-year basis to 27.6 trillion (US$3.3 trillion) at the end of last year, 2.4 percentage points faster than the previous year.

Their total liabilities stood at 26.57 trillion yuan (US$3.2 trillion) at the end of 2003, up 17.2 percent year-on-year, 2.3 percentage points faster than 2002.

Chinese banks lent aggressively to tap recovering economic activity, refueling over-investment in steel, cement and aluminum sectors, as bank deposits continued to expand last year.

The total assets of China's four state-owned commercial banks rose by 13.7 percent on a year-on-year basis to 15.19 trillion yuan (US$1.83 trillion) at the end of last year, or 55 percent of all assets by financial institutions, the commission said. Their total liabilities grew by 14.1 percent to 14.58 trillion yuan (US$1.75 trillion).

Last year's rapid credit growth has prompted worries about the quality of Chinese banks' new loans. Chinese banking institutions' total non-performing loans stood at 2.4 trillion yuan (US$289 billion), or some 15 percent of outstanding loans, at the end of last year.

The Chinese Government injected US$45 billion of capital into the Bank of China and the China Construction Bank late last year to prepare them for initial public offerings.

(China Daily March 10, 2004)