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China’s bank lending in August a lot more than doubled in the previous month, but analysts said a great deal of the gain was as a result of strong mortgage demand, increasing evidence that Chinese companies are increasingly hesitant to make new investments.

The figures, along with other data in the week, paint an image of any economy which is improving slowly but increasingly reliant on a housing boom and government spending for growth.

Chinese banks extended 948.7 billion yuan ($142.23 billion) in 房貸 in August, well above expectations, while broad M2 money supply (M2) also grew from a more-than-expected 11.4 percent from the year earlier, according to central bank data on Wednesday.

New bank lending rebounded sharply from July’s 463.6 billion yuan, that was the cheapest in 2 years, while M2 quickened from July’s 10.2 percent rise, which was the weakest in 15 months.

The central bank has pledged to help keep policy slightly loose, but sources say it is actually reluctant to cut interest rates or bank reserves again in the near term amid evidence that companies and banks are hoarding cash instead of investing it.

“A renewed pick-up in credit growth recently will increase the growing sense among investors that the near-term outlook for China’s economy is rather bright,” said Julian Evans-Pritchard at Capital Economics.

“Credit growth remains to be very likely to slow over coming months as being the PBOC refrains from further easing and focuses much more on credit risks. However with recent activity data also strengthening, we expect economic growth to boost within the remainder of the year.”

Data on Tuesday showed China’s factory output and retail sales also grew faster than expected in August like a strong housing marketplace plus a government infrastructure spending spree underpinned increase in the world’s second-largest economy.

But August readings also highlighted imbalances in the economy, with private investment growth at record lows and exports still sluggish.

China’s increasingly reliance on the house market is another major concern, as more cities impose restrictions on home purchases from the face of sharply rising house prices, threatening to finish a near one-year rally.

A sharp price correction would enhance strains on banks which are already wrestling with growing numbers of bad loans.

Household loans, mostly mortgages, taken into account 71 percent of total new bank loans in August, though these were down from a lot more than 90 percent in July, data showed.

“Home loans remain the most important driver of loan growth, based upon booming housing marketplace and weak loan demand from corporates,” David Qu and Raymond Yeung at ANZ said within a note.

Outstanding yuan loans grew at 13 percent by month-end upon an annual basis.

Analysts polled by Reuters had expected new lending of 750 billion yuan, with outstanding loans seen rising 12.9 percent, and money supply seen up 10.4 percent.

Total social financing (TSF), an extensive measure of credit and liquidity inside the economy, jumped to 1.47 trillion yuan in August from 487.9 billion yuan in July.

TSF includes off-balance sheet forms of financing that exist beyond the conventional bank lending system, for example initial public offers, 房屋貸款 from trust companies and bond sales.

M1 money supply, which include cash and short-term deposits, rose 25.3 percent in August from your year earlier. The widening gap between M1 and M2 growth has fueled concerns in regards to a “liquidity trap” in dexrpky35 economy where companies remain cautious about investing regardless of how much stimulus money policymakers pump in the system.

“The rapid growth and development of M1 money supply indicates corporates’ preference of holding cash instead of investment. This is certainly consistent together with the slowing trend in fixed asset investment by the private sector,” ANZ said.

Chester Liaw, an economist at Forecast Pte Ltd in Singapore, said the spread between M1 and M2 growth narrowed to 13.9 percentage points from 15.2 recently but “remains at elevated levels.”

The PBOC is focusing on annual M2 development of around 13 percent this year, pointing to continued accommodative policy as Beijing pledges to embark on painful economic restructuring involving state-owned enterprises in key industrial sectors.

Policy insiders have mentioned that evidence companies and banks are hoarding cash, alongside concerns about property market and also the yuan’s stability, has reinforced policymakers’ view there is no major benefit in easing policy further.