Are Chinese commercial banks lending too rapidly?

Local Chinese Media reported this week that China may issue special Treasury bonds later this year to help curb excess liquidity, citing unidentified officials from the China Banking Regulatory Commission.

The report claimed the government may also again ask commercial banks to set aside more money as reserves to curb loan growth. It quoted the officials speaking at a work meeting discussing China’s economic performance in the first quarter.

The officials did not give a specific timetable or possible sizes for the bond issue and reserves increase. The regulator warned 10 commercial lenders, including China Construction Bank, Bank of China, and Bank of Communications, at the meeting for expanding lending “too rapidly” in the first quarter.

Do you think that lending has indeed expanded ‘too rapidly’ or is the pace just right for the Chinese potential? Can the Chinese government expect the commercial banks’ complete cooperation in this endeavour?