China Money April 2018


China: Credit conditions improve in April

May 11, 2018

Chinese banks distributed CNY 1.18 trillion (USD 185 billion) in new yuan loans in April, up from March’s CNY 1.12 trillion and broadly in line with market expectations of CNY 1.10 trillion. In the 12 months up to April, new yuan loans totaled CNY 14.2 trillion (12 months up to March: CNY 14.2 trillion).

Total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—grew from CNY 1.33 trillion in March to CNY 1.56 trillion in April.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—inched up from March’s all-time low of 8.2% to 8.3% in April. The reading came in below the 8.5% that market analysts had expected.

The People’s Bank of China is moderating its campaign to reduce risks in the financial sector and, instead, is gradually supporting credit growth in order to shore up economic activity amid ongoing trade disputes between China and the United States.

FocusEconomics Consensus Forecast participants expect M2 to expand 8.9%, in 2018 which is down 0.1 percentage points from last month’s forecast. In 2019, the panel sees M2 growth of 8.8%.


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China Money Chart

China Money April 2018 0

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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