The once runaway credit extension in Shanghai, a financial hub in east China, has slowed down notably, signifying that the Chinese government's efforts to cool down the structurally overheated national economy have started to pay off.

According to the latest statistics provided by the Shanghai Banking Regulatory Commission, all financial institutions, including foreign-funded ones, in the city, extended 101.863 billion yuan (US$12.3 billion) in loans in the first five months of this year, a decrease of 8.4 billion yuan (US$1,012 million) from the year-earlier level.

The figure brought the loans outstanding at the institutions to1, 419.676 billion yuan (US$171 billion) by the end of May.

Of the loans made between January and May, 78 billion yuan (US$9.4billion) was granted by Chinese financial institutions, down 22.3 billion yuan (US$2.7 billion) from a year earlier.

As part of its macro-regulatory measures, China has decided to rigorously restrict credit extension to overheated sectors, including steel, cement, electrolytic aluminum, automotive and real estate sectors.

(Xinhua News Agency June 14, 2004)