China has extended a requirement for six major banks to set aside additional money by another three months, state media said Monday, as authorities step up efforts to stem the flood of liquidity.

The report came after the central bank said Friday it would increase the bank reserve requirement ratio by 50 basis points, marking the sixth such move this year and highlighting growing anxiety among top leaders over inflation.

The People's Bank of China extended the two-month order imposed on the six banks in October until March, the China Business News said on its website, citing unnamed sources.

The six banks include the four major state-run lenders — Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China, the report said.

The other two lenders are China Merchants Bank and China Minsheng Banking Corp, it said.

The report didn't specify the current reserve requirement ratio for the six banks.

China has been trying to rein in bank lending amid growing fears that the flood of credit is fanning inflationary pressures and could lead to a damaging property bubble and a new crop of bad loans.

Consumer prices topped five percent in November for the first time in more than two years, data released Saturday showed, a figure analysts said would lead to fresh interest rate hikes as officials battle to curb rising prices.

Top leaders agreed that stabilising prices should be a higher priority as they resolved to manage inflation expectations in an "active and stable way", the official Xinhua news agency said Sunday at the end of an annual economic work meeting.

earlier related report

OECD sees improvement in US, China economies
Paris (AFP) Dec 13, 2010 –

The pace of economic growth has stabilised in the world's leading industrialised states, with a pick-up noted in the United States and China and moderation in Germany and Japan, the OECD said Monday.

The Organisation for Economic Cooperation and Development in another report Monday said a strong economic recovery in ASEAN nations was now losing steam.

The OECD said its index of composite leading indicators showed that for the United States, China and to a lesser extent France showed "signs of improvement" in October compared to September.

In Germany and Japan the indicators "show moderation toward a stable pace of expansion."

"Downturn signals are still evident in Canada, Italy and India while Brazil remains in a slowdown phase," the OECD reported.

The organisation, which coordinates economic policy among the world's principal industrialised nations, said that in southeast Asia, the growth picture was mixed.

A "solid recovery" was under way in the Philippines, powered by exports, while in Malaysia activity was slowing in the face of weak trade levels.

Lackluster production and retail sales were hampering Singapore, the OECD said, while the Thai economy was "relatively stable, supported by solid production activities."

Indonesia was displaying signs of slowing.

The report said that in China, a non-ASEAN nation, a slowdown appeared to have "bottomed out" thanks to a revival in investment and retail sales.

But recovery in India, also a non-ASEAN nation, was faltering as trade and production indicators weaken.

The OECD found that "uncertainty" surrounding near-term prospects in OECD countries would continue to affect economic trends in southeast Asia.

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