Surging bank loans dominate credit expansion in November

China's central bank's interest rates cut in late November is widely believed to be behind the surge in new loans last month. Despite growing bank credit, money supply continued to moderate in November as growth of M2, a broad measure of money supply including cash in circulation and all deposits, moderated to an eight-month low of 12.3 percent year on year.

"The bigger picture is that credit growth overall remains on a downward path," said Julian Evans-Pritchard, China economist with Capital Economics. "A loosening of restrictions on lending has not translated into faster credit growth overall."

China set its annual target for monetary growth at 13 percent during its annual parliamentary session in March. Growth of money supply slowed after reaching a peak of 14.7 percent year on year in June.

"The Central Economic Work Conference clearly stated that China's monetary policy needs to be 'appropriate' to stabilize growth and relieve corporations' difficult operating environment. This signals that a reserve requirement ratio cut will be coming soon," said ANZ economists Liu Ligang and Zhou Hao in a research note on Friday.