CHINA AUGUST NEW LOANS UP

BEIJING-11/9-Chinese financial institutions issued a greater-than-expected 703.9 billion yuan ($111.1 billion) worth of new yuan loans in August, according to data from the central bank Tuesday, reflecting efforts to boost the world's second-largest economy.

The new credits issued last month were up from the CNY540.1 billion recorded in July and were above the CNY600 billion median forecast from 13 economists surveyed by Dow Jones Newswires.

Meanwhile, total social financing totalled CNY1.24 trillion in August, CNY188.5 billion more than the July level, the People's Bank of China said in a statement on its website. The measure was designed by the central bank to better gauge the supply of credit in the economy beyond the traditional measure of new yuan loans.

"The increases in total social financing and bank loans reinforce our belief that the government's policy stance has become more proactive," said Nomura economist Zhang Zhiwei.

Infrastructure investment should rise further in the coming months as project approvals have picked up and access to credit has been eased, Mr. Zhang said. The rebound in housing investment should also contribute to the recovery, he added.

The increase in new yuan loans in August was due to more funding for infrastructure projects, and the level of new credits will be around CNY700 billion a month over the remainder of this year, said Societe Generale economist Yao Wei.

She said she expects total new yuan loans for 2012 to rise to about CNY8.5 trillion, from CNY7.47 trillion recorded in 2011.

Net corporate bond financing also rose to CNY258.4 billion in August from July's CNY248.7 billion, according to PBOC data.

The PBOC is likely to release data for M2, China's broadest measure of money supply, later this week. Economists expect M2 to be 14.0% higher at the end of August compared with the same month a year ago.

Write to Liu Li at li.liu@dowjones.com