China's banks extended 4.22 trillion yuan (613 billion U.S. dollars) in new yuan loans in the first quarter of 2017, down from 4.61 trillion yuan last year, central bank data showed Friday.
At the end of last month, total outstanding yuan-denominated loans stood at 110.83 trillion yuan, up 12.4 percent compared with the previous year.
A slowdown in credit expansion means that the economy is levering up at a slower pace, according to Tom Orlik, chief Asia economist at Bloomberg.
Total social finance, a measurement of funds that non-financial firms and households get from the financial system, stood at 162.82 trillion yuan at the end of March, up 12.5 percent year on year, according to the PBOC data.
"The year-on-year growth of social finance in the first quarter suggests that support for the real economy has not eased off," said Ruan Jianhong, head of the Survey and Statistics Department at the central bank.
A breakdown of loan data also showed milder growth in mortgage lending, with outstanding real estate loans rising 26.1 percent year on year, down 0.9 percentage points compared with the overall growth in 2016.
The new data implies that government measures to address property speculation have begun to take effect, said Dong Ximiao with the Renmin University of China.
M1, a narrow measure of money supply which covers cash in circulation plus demand deposits, rose 18.8 percent from a year earlier to 48.88 trillion yuan. M2, a broad measure of money supply that covers cash in circulation and all deposits, grew 10.6 percent to about 160 trillion yuan, according to a People's Bank of China online statement.
M0, the amount of cash in circulation, was up 6.1 percent to 6.86 trillion yuan.
China's M2 target this year is growth of around 12 percent, one percentage point lower than the 2016 target.
"The smooth deceleration of M2 growth signals the implementation of the 'prudent and neutral' monetary policy and strengthened government supervision over the mounting leverage among financial institutions," said Ruan.
Ruan said M2 growth in the first quarter is in line with overall economic development.
Official data also indicated yuan-denominated deposits grew by 5.06 trillion yuan in the first quarter, with outstanding deposits at 156trillion yuan.
