China Money August 2021


China: Credit growth eases in August

September 10, 2021

In August, Chinese banks distributed CNY 1.2 trillion (roughly USD 190 billion) in new yuan loans, up from July’s 1.1 trillion figure.

Annual growth in M2 money supply dipped from 8.3% in July to 8.2% in August, while annual growth in the stock of total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—was down from 10.7% to 10.3%. Softer credit data in August came despite the PBOC cutting the reserve requirement ratio by 0.5 percentage points in July, and suggests the authorities are keen to maintain a prudent stance.

Most of our panelists see the Bank’s key policy interest rates remaining unchanged through year-end.

FocusEconomics Consensus Forecast participants expect M2 to expand 9.3% in 2021, which is down 0.1 percentage points from last month’s forecast. In 2022, the panel sees M2 growth of 8.6%.

Author:, Economist

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China Money Chart

China Money August 2021

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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