China: Credit and money data paint mixed picture in November
In November, Chinese banks distributed CNY 1.25 trillion (USD 182 billion) in new yuan loans, well above the CNY 697 billion distributed in October and market expectations of CNY 1.10 trillion. In the 12 months up to November, new yuan loans totaled CNY 15.7 trillion (12 months up to October: CNY 15.5 trillion).
Meanwhile, annual growth in M2—the broadest measure of money supply in China—was stable at October’s 8.0% in November. The reading matched market expectations of a 8.0% increase.
Total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—rose from CNY 743 billion in October to CNY 1.52 trillion in November.
Analysts at Nomura comment that the increase in total social financing came on the back of:
“a rise in bank lending and corporate bond issuance more than offset the continued contraction in shadow banking financing. The rapid rise in bank lending and corporate bond financing suggests Beijing has recognised the strong downward pressure on growth and has become increasingly more serious about stimulating the economy.”