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BEIJING - China plans to target broad money supply growth of around 12 percent in 2017, slightly lower than last year's goal, policy sources said, signaling a bid to contain debt risks while keeping growth on track. Under its new "prudent and neutral" policy, the People's Bank of China (PBOC) has adopted a modest tightening bias in a bid to cool torrid credit expansion, though it is treading cautiously to avoid hurting the economy.
The M2 growth target was endorsed by leaders at the closed-door Central Economic Work Conference in December, according to sources with knowledge of the meeting outcome. "It's not necessary to maintain last year's high money supply growth," said a source who advises the government. "A money supply rise of 11 percent should be enough for supporting growth, but we probably need to have some extra space, considering risks in the process of deleveraging."
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