China Money September 2016


China: Credit and monetary conditions continue to improve in September

October 18, 2016

Chinese banks extended CNY 1.22 trillion (USD 181 billion) in new yuan loans in September, which marked an improvement from August’s CNY 949 billion and represented a three-month high. September’s print also overshot the CNY 1.00 trillion the markets had expected. In the 12 months up to September, new yuan loans totaled CNY 12.0 trillion (August: CNY 11.8 trillion).

Total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—jumped from August’s CNY 1.47 trillion to September’s six-month high of CNY 1.72 trillion. The print exceeded the CNY 1.39 trillion the markets had expected.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—rose from August’s 11.4% to 11.5%. The reading came in slightly below the 10.6% rise the markets had expected.

FocusEconomics Consensus Forecast participants expect M2 to expand 12.0% in 2016, which is down 0.1 percentage points over the previous month’s forecast. In 2017, the panel sees M2 growth of 11.4%, which is also down 0.1 percentage points from last month’s estimate.


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China Money Chart

China Money September 2016

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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