Chinese banks extended more loans than expected in September, buoyed by demand from home buyers and companies, even as the government tightened the screws to wean the economy off its years-long addiction to cheap debt.

Banks extended ¥1.27 trillion ($245 billion) in net new yuan loans in September, central bank data showed on Saturday, well above analysts' expectations.

Analysts polled by Reuters had predicted new yuan loans would rise slightly to ¥1.1 trillion, from ¥1.09 trillion in August.

Household loans, mostly mortgages, rose to ¥734.9 billion in September from ¥663.5 billion in August, according to Reuters calculations based on the central bank's data.

Household loans accounted for 58 per cent of total new loans last month, down from 61 per cent in August.

Corporate loans were ¥463.5 billion in September, compared with ¥483 billion a month earlier.

Broad M2 money supply (M2) in September grew 9.2 per cent from a year earlier, beating forecasts for an expansion of 8.9 per cent, which was the August expansion.

China's central bank has said that the slowing M2 growth could be a "new normal" due to regulators' stepped-up crackdown on risky shadow lending activities.

Total social financing (TSF), a broad measure of credit and liquidity in the economy, rose to ¥1.82 trillion in September from ¥1.48 trillion in August, the data showed.

Capital Economics had expected TSF to pick up to ¥2 trillion in September.

Walking a tightrope

Chinese authorities are trying to walk a fine line by containing riskier types of financing and slowing an explosive build-up in debt without stunting economic growth.

But results of their "de-risking" campaign have been mixed so far.

Regulators appear to have made good inroads into reducing risks in the financial system from interbank and shadow bank lending – which were arguably China's most immediate systemic threat – and they have allowed borrowing costs to creep up.

However, credit growth has remained elevated and there is little evidence that companies are using windfall earnings this year to significantly reduce massive debt burdens.

Indeed, consultancy China Beige Book International (CBB) cautioned in its latest report about the prevailing market view that China's economic growth has so far been resilient to government policy tightening, arguing that it has yet to really kick in.

"The mistake is that deleveraging hasn't gotten off the ground," said CBB, which surveys thousands of firms quarterly. "If 2018 sees actual tightening, it will be far more traumatic to firms than most analysts realize."

S&P; downgraded China's sovereign rating in September, saying its attempts to reduce debt risks are not working as quickly as expected and credit is still expanding too fast.

The International Monetary Fund warned this year that China's credit growth was on a "dangerous trajectory" and called for "decisive action", while the Bank for International Settlements said in late 2016 that excessive debt growth was signalling a banking crisis in the next three years.

Both bank lending and total social financing look set to hit another record high this year.