China's bank lending trumped forecasts to spike to 1.01 trillion yuan ($160.1-billion U.S.) in March, a sign of fresh traction in Beijing's efforts to ease monetary policy and boost credit creation to support the cooling economy.
The surge in lending was the biggest monthly extension of credit since January 2011, when new loans last topped 1 trillion yuan.
It was matched by stronger-than-expected growth in money supply, which rose 13.4 per cent in March from a year ago, data showed on Thursday.
"The new loans number is very strong. It signals that loan demand has rebounded and shows that the economy is turning," said Zhang Zhiwei, an economist at Nomura in Hong Kong.
"This is another signal that reinforces our view that the first quarter is the bottom of the cycle and that momentum is picking up."
A Reuters poll showed economists had expected banks to make 800 billion yuan worth of new loans in March, and money supply to grow 12.9 per cent after February's 13 per cent expansion.
Bank lending is a focal point in China's monetary policy and is controlled by Beijing, which tells banks exactly how much to lend.
Sources say Beijing has told banks to lend 8 trillion yuan this year, up from a 2011 target of between 7-7.5 trillion yuan. These loan targets are not announced publicly.
China's foreign exchange reserves, the world's largest, increased around $124-billion in the first quarter to $3.305-trillion at the end of March, reversing a rare decline of $20.6-billion in the fourth quarter.
Outstanding yuan loans at the end of March were 57.25 trillion yuan, an increase of 15.7 per cent from a year earlier.
The World Bank cut its forecast for China's 2012 economic growth to 8.2 per cent on Thursday from 8.4 per cent and said a rebound might not begin before the third quarter of the year as slack foreign demand and a government-induced real estate slowdown restrain a recovery.
The Bank's revisions to its outlook for the Chinese economy come ahead of China's official first-quarter growth report due on Friday at 0200 GMT, which is expected to show the country suffering its slowest three months of growth in three years.
Economists polled by Reuters in March forecast Q1 GDP growth at 8.3 per cent versus a year earlier.