Be cautious with loans

The surge of bank loans in the first quarter leaves little room for any doubt now about China's capacity to revive its economy with a liquidity flood.

According to the People's Bank of China, the country's new lending increased by a record 1.89 trillion yuan ($276 billion) in March, pushing the total for the first three months to a jaw-dropping 4.58 trillion yuan.

The authorities have explicitly made moderately loose monetary policy a key part of the country's efforts to fight economic downturn. The central government announced a target of at least 5 trillion yuan of new loans this year.