China's "big four" state-owned commercial banks—Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank—lent 188 billion yuan ($29.59 billion) in June 2012, much less than the 250 billion yuan ($39.35 billion) in May. The number is also much lower than market expectations.

Right now, stabilizing economic growth has been put on the country's top agenda. According to past experiences, bank loans are usually a major force in stimulating, ensuring and stabilizing growth. That's the reason for previous loan surges. Why is it different this time?

Cash-strapped companies are mired in production and operation difficulties, but they don't have strong demands for bank loans.

Enterprises that have seen decreasing profits or have turned into losses from profits are not willing to acquire bank loans, because more loans mean more interests. Many large enterprises, especially stateowned ones, prefer direct financing, such as issuing corporate bonds or getting listed, ending up with dwindling demand for bank loans. Banks themselves don't have a strong will to lend.

Amid economic slowdown, the more difficulties companies have in their business operation, the more lending risks banks will shoulder. Banks are now prudent and alert against lending risks.

Since the first quarter of this year, a strange phenomenon has appeared. Cashstrapped enterprises are not willing to borrow and banks are not willing to lend any more. The amount of newly added loans has been under market expectations for several consecutive months. It reflects the mounting pressure of an economic slowdown and the sluggishness of industrial enterprises.

However, each coin has two sides. What's comforting is that during this round of economic stimulus to stabilize growth, banks are not demanded to lend and commercial banks have total independence on the amount of loans they want to grant based on their risk control ability and liquidity situation.

Commercial banks have shown their rarely seen prudence and conservativeness by not emphasizing on the quantity but on the quality, safety, profits and liquidity of bank loans.

But what's worrying is that commercial banks' prudent and conservative attitudes are bad for stabilizing economic growth. China's economic growth partially relies on the financial support of bank loans.

Commercial banks, especially the "big four," should provide more support and speed up the loan process for key projects, affordable housing and small and medium-sized companies.

Otherwise, the risks for already existing loans will increase if there are no follow-up loans. For instance, if banks have provided a large amount of loans for a project but refuse to lend more, the project may fail, posing risks to previous loans.

Anyway, commercial banks, the "big four" in particular, should play a full role in stabilizing economic growth.

This is an edited excerpt of an article by Yu Fenghui, a business commentator, published in The Beijing News