China Money August 2016

China

China: Credit conditions improve in August

September 14, 2016

Chinese banks extended CNY 949 billion (USD 142 billion) in new yuan loans in August, which marked an improvement over July’s two-year low of CNY 464 billion. August’s print also overshot the CNY 750 billion the markets had expected. In the 12 months up to August, new yuan loans totaled CNY 11.8 trillion (July: CNY 11.7 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 July’s CNY 488 billion to CNY 1.47 trillion in August. The print exceeded the CNY 900 billion the markets had expected.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—rose from July’s 15-month low of 10.2% to 11.4% in August. The reading came in well above the 10.5% rise the markets had expected.

August’s rebound in credit growth and finance aggregate suggest that the People’s Bank of China’s accommodative monetary policy remains firmly in place. Xiangrong Yu, China economist at CICC, points out that:

“Continued economic reflation and rising property prices, as well as exchange rate concerns, will constrain the scope for monetary easing. We expect no interest rate cuts in 2H16 and recognize that the real challenge to monetary policy is the effectiveness of its transmission. Coordinated fiscal efforts can facilitate channeling of the hoarded liquidity to the real economy. That said, the PBoC will still need to keep liquidity conditions relatively stable. A consistent and transparent policy setting will help anchor market expectations and support economic activity.”

FocusEconomics Consensus Forecast participants expect M2 to expand 12.3% in 2016, which is up 0.1 percentage points over the previous month’s forecast. In 2017, the panel sees M2 growth of 11.6%.


Author: Ricard Torné, Lead Economist

Sample Report

Looking for forecasts related to Money in China? Download a sample report now.

Download

China Money Chart


China Money August 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.


China Economic News

  • China: Inflation slows in November

    December 10, 2018

    Consumer prices fell 0.3% from the previous month in November, contrasting October’s 0.2% increase and marking the lowest print in eight months.

    Read more

  • China: Manufacturing sector slows to a standstill in November, PMI inches down to over two-year low

    November 30, 2018

    The manufacturing purchasing managers’ index (PMI) published by the National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP) edged down to an over two-year low of 50.0% in November from 50.2% in October, undershooting market expectations of a stable 50.2% reading.

    Read more

  • China: Growth in house prices inches up in October

    November 15, 2018

    House prices in 70 large- and medium-sized cities rose 1.0% in October in month-on-month terms according to a weighted average index calculated by Thomson Reuters from data issued by the National Bureau of Statistics (NBS).

    Read more

  • China: Industrial production growth inches up in October

    November 14, 2018

    Industrial production expanded 5.9% year-on-year in October, up from a 5.8% rise in September and overshooting market expectations of 5.8%. October’s print mainly reflected faster growth in the mining and manufacturing sectors, while the dynamics in the production and distribution of electricity, heating power, gas and water softened compared to September. On a month-on-month basis, industrial production increased 0.48% in seasonally-adjusted terms in October, unchanged from September’s expansion.

    Read more

  • China: Investment growth accelerates to four-month high in October

    November 14, 2018

    Urban fixed asset investment expanded 5.7% annually in the first 10 months of the year, up from the 5.4% increase in the first 9 months of the year.

    Read more

More news

Search form