China Money


China: Credit conditions improve slightly in May

June 11, 2015

New yuan loans totaled CNY 901 billion (USD 145 billion) in May, which was above the CNY 708 billion recorded in the previous month. Furthermore, the print overshot the CNY 850 million that market analysts had expected. In the 12 months up to May, new yuan loans totaled CNY 10.4 trillion (April: CNY 10.4 trillion).

Total social financing—a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments—rose from CNY 1.05 trillion in April to CNY 1.22 trillion in May. The print came in above the CNY 1.10 trillion that market analysts had expected.

Annual M2 growth, the broadest measure of money supply in China, recovered from April’s all-time low of 10.1% and rose to 10.8% in May. The result overshot the 10.4% increase the market had expected.

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 May 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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