China Money


Robust credit indicators in November

New yuan loans totalled CNY 625 billion (USD 103 billion) in November, which was above the CNY 506 billion recorded in the previous month. The print overshot market expectations of loans totalling CNY 580 billion. In the 12 months up to November, new yuan loans totalled CNY 8.85 trillion (October: CNY 8.75 trillion).

Total social financing - a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments - jumped from CNY 856 billion in October to CNY 1.2 trillion in November. Meanwhile, in order to manage liquidity from the money market, the People's Bank of China (PBOC) continued to conduct its twice-a-week reverse repurchasing operations.

According to analysts, November's stronger-than-expected credit expansion suggests that the government is seeking to ensure enough liquidity to support economic growth.

M2, the broadest measure of money supply in China, rose 14.2% over the same month last year in November (October: +14.3% year-on-year). The increase was in line with market expectations.

The government's M2 growth target for this year is 13.0%. FocusEconomics Consensus Forecast participants expect M2 to expand 14.1% in 2013, which is up 0.1 percentage points over the previous month's forecast. In 2014, the panel sees M2 growth at 13.2%, which is also up 0.1 percentage points compared to last month's estimate.

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China Money Chart

China Money November 2013

Note: New yuan loans in CNY billion and year-on-year variation of M2.
Source: People's Bank of China (PBOC) and FocusEconomics calculations.

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