Chinese banks made about 600 billion yuan ($88 billion) in new loans in the first week of 2010, the Economic Information Daily reported on Monday.

This surge in loans, nearly twice as much as the monthly average in the last half of 2009, could prompt the central bank to step up credit controls, it added.

The newspaper, which is published by the official Xinhua News Agency, did not identify its source.

Chinese banks traditionally rush to book loans in January to boost their full-year interest earnings, and part of their haste now probably also stems from fears that officials will soon slam shut the door on lending.

The People's Bank of China pushed up the yield on its three-month bills by 4 basis points last Thursday, signaling the start of a gradual tightening of excess liquidity that will eventually lead to higher policy rates.

The central bank will announce money supply and loan figures for December any time this week. In the first 11 months, new loans reached 9.21 trillion yuan.

Analysts expect the country's banks will lend about 7.5 trillion yuan this year, down from a record 9.5 trillion yuan in 2009.

(Reporting by Langi Chiang and Simon Rabinovitch; editing by Ken Wills)

China