UPDATE 1-China new loans may fall to 6 trln yuan in 2010-paper

(Adds comments about growth restructuring, background)

SHANGHAI Dec 2 (Reuters) - New bank lending in China may fall to around 6 trillion yuan to 7 trillion yuan ($880 billion to $1 trillion) in 2010 from roughly 10 trillion yuan this year as the economic recovery takes firmer hold, the China Securities Journal said on Wednesday.

The estimate was based on the premise of 16 to 17 percent growth in the broad money supply next year, the newspaper cited unidentified experts as saying.

New loans could reach about 8 trillion yuan in 2010 if broad money supply grows 20 percent, it said.

Strong bank lending is an important factor underlying China's quick economic rebound from the financial crisis and its new loan figures are carefully scrutinized by global investors.

After an unprecedented surge of 7.37 trillion yuan in new loans in the first half, Chinese banks, almost all of which are state owned, have slowed their pace of lending in the second half.

Policymakers are concerned over a possible rise in bad debts if break-neck lending continues and that money from some loans may be going into property and stock market speculation rather than being used for real economic activity.

China's top leaders will discuss broader economic objectives for next year, potentially including a finalized loan target, at the key annual Central Economic Work Conference over the next week. That meeting is also expected to look at how China can re-orient its growth model towards greater reliance on domestic consumption and less on investment and exports.

To that end, Liu Shangxi, vice head of research at the Ministry of Finance, said China needs to relax price controls and break monopolies in certain industries.

The government should also step up efforts to increase the proportion of household income in its national revenue, expanding public investment in education, job training and healthcare, so that people will be able to spend more, he said.

"The government has a clear understanding about the necessity of changing its development style. But that doesn't mean it will do exactly that," he told the 21st Century Business Herald.

China should flesh out specific targets for boosting consumption and, to enshrine them as policy priorities, it should include them in the formal five-year plans that guide decision making, he said. ($1=6.827 Yuan) (Reporting by Fang Yan, Langi Chiang and Jacqueline Wong; Editing by Kim Coghill) ((yan.fang@thomsonreuters.com; Reuters Messaging: yan.fang.reuters.com@reuters.net; +86 21 6104 1793)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))