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China: Credit data stabilizes in August after July's surge on stock market rescue

September 11, 2015

New yuan loans totaled CNY 810 billion (USD 127 billion) in August, which was well below the CNY 1.5 trillion recorded in the previous month. Furthermore, the print slightly undershot the CNY 820 billion that market analysts had expected. Analysts believe that the moderation in new credit—which hit an over-six-year high in July—reflect that the government has started to step down its efforts to stabilize the stock markets. In the 12 months up to August, new yuan loans totaled CNY 11.8 trillion (July: CNY 11.7 trillion), thereby hitting an all-time high.

Total social financing—a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments—rose from CNY 719 billion in July to CNY 1.1 trillion in August. The print came in above the CNY 1.0 trillion that market analysts had expected.

Annual M2 growth, the broadest measure of money supply in China, stabilized at July’s 13.3% in August. The result matched what the market had expected.

The government targeted M2 growth at 12.0% for this year. FocusEconomics Consensus Forecast participants expect M2 to expand 12.0% 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 August 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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