China Money


China: Credit conditions deteriorate sharply in April

May 13, 2015

New yuan loans totaled CNY 708 billion (USD 114 billion) in April, which was well below the CNY 1.18 trillion recorded in the previous month. Furthermore, the print undershot the CNY 903 million that market analysts had expected. In the 12 months up to April, new yuan loans totaled CNY 10.4 trillion (March: CNY 10.4 trillion).

Total social financing—a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments—eased from CNY 1.18 trillion in March to CNY 1.05 trillion in April, which represented a six-month low. The print came in well below the CNY 1.20 trillion that market analysts had expected.

Annual M2 growth, the broadest measure of money supply in China, fell sharply from March’s 11.6% to 10.1% in April. The result was below the 11.9% increase the market had expected and represented the smallest increase on record.

The government targeted M2 growth at 12.0% for this year. FocusEconomics Consensus Forecast participants expect M2 to expand 12.1% in 2015, which is unchanged over the previous month’s forecast. In 2016, the panel sees M2 growth of 11.6%.

Author: Ricard Torné, Lead Economist

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China Money Chart

China Money April 2015

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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