2012.06.05 08:28:50 GLOBAL MARKETS: European Stocks to Start Up; Finance Ministers' Call In Focus

0634 GMT [Dow Jones] Chinese credit growth is slowing at a faster pace, and as much as CNY4 trillion in policy easing may be needed this year, says Fitch Ratings. It says easing could be provided via a mixture of targeted RRR cuts, maturing central bank bills, central bank lending and auctions of fiscal deposits. The agency says CNY1 trillion in easing had already been applied mid-April. It notes, expansion in China's output is slowing in-line with credit growth, indicating that the economic return on credit remains weak, and estimates that in 2012 every CNY1 in new financing will yield only CNY0.39 in new GDP vs CNY0.73 before the global financial crisis. The agency says 2012 is likely be the first year since 2008 that the net amount of new credit extended to the economy drops below the previous year's. Slowing credit growth reflects more subdued demand for loans--due to property market restrictions, higher cost of borrowing and a slowing economy--while pressures on bank funding also curb supply, it adds. (natasha.brereton-fukui@dowjones.com) Contact us in Singapore. 65 64154 140; MarketTalk@dowjones.com (END) Dow Jones Newswires June 05, 2012 02:34 ET (06:34 GMT)