POLL-China July money growth picks up on loan surge

* What: China July money supply, loan data

* When: No fixed time, but Aug 15 at latest

* M2 growth strong; lending eases a touch

BEIJING, Aug 6 - China's money supply probably grew strongly in July as Beijing kept monetary conditions loose to support the economic recovery, but lending eased in what is typically a slow month for loans.

The median forecast of 23 economists polled by Reuters is for annual growth of 28.8 percent in the broad M2 measure of money supply in July, a slight acceleration from 28.5 percent in June.

They also predicted that outstanding yuan loans rose by 34.3 percent in July from a year earlier, down a touch from 34.4 percent in June.

Chinese media have reported that new lending in July was likely about 500 billion yuan, a big drop from the average monthly new lending of 1.23 trillion yuan so far this year. Still, 500 billion yuan is about four-times the historical average for July over the past decade.

Beijing has allowed the rampant bank lending to continue unhindered until now in the belief that easy money was needed to fuel economic recovery, but in recent weeks officials have voiced concern that the lending could also fuel stock and property market bubbles.

Chinese banks issued a whopping 7.37 trillion yuan in new loans in the first six months of this year, equivalent to about 25 percent of the country's GDP.

An earlier poll, based on a smaller number of respondents, had produced a yuan loan growth forecast of 34.4 percent. For story, see [ID:nPEK345735]

China is expected to remain flush with liquidity from the first-half loan surge even if new credit growth slows.

For an analysis on the lending outlook and recent trends click [ID:nPEK354256].

FORECASTS

M2 Yuan loans Bank of China 26.0 Bank of Communications 29.0 34.3 Bank of East Asia 28.2 BNP Paribas 28.2 34.3 Bohai Securities 28.8 34.0 China Construction Bank 29.0 34.4 China Jianyin Investment Securities 34.0 China Securities 29.0 32.0 CITIC Securities 28.8 33.8 Deutsche Bank 30.0 34.4 Essence Securities 29.5 33.4 Fortune Trust 28.2 35.0 Galaxy Securities 28.6 34.6 Industrial Bank 29.1 34.6 Industrial Securities 28.9 34.5 ING 28.4 31.8 J.P. Morgan 26.8 Merrill Lynch 29.0 34.4 Orient Securities 28.5 34.5 Royal Bank of Scotland 27.0 Shanghai Securities 28.4 31.2 Shenyin & Wanguo Securities 28.5 33.9 SJS Markets 29.2 31.9 UBS 29.6 36.5 ------------------------------------------------------- MEDIAN 28.8 34.3 Previous month 28.5 34.4 Year earlier 16.4 14.6

~Not available > For the full July data poll, double-click on [ID:nPEK345735] > For the China indicators fixed page, double-click on <CN/DATA> > For historical data, double-click on [ID:nPEK257948]