China Money March 2017


China: Financial conditions worsen in March

April 14, 2017

Chinese banks extended CNY 1.02 trillion (USD 148 billion) in new yuan loans in March, below February’s CNY 1.17 trillion. The print undershot the CNY 1.25 trillion the markets had expected. In the 12 months up to March, new yuan loans totaled CNY 12.3 trillion (February: CNY 12.6 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 February’s CNY 1.15 trillion to CNY 2.12 trillion in March. The print was below market analysts’ expectations of CNY 1.50 trillion.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—declined from 11.1% in February to 10.6% in March. The reading was an eight-month low and fell short of the 11.1% that market analysts had expected.

The government set a M2 growth target of 12.0% for this year. FocusEconomics Consensus Forecast participants expect M2 to expand 11.0% in 2017, which is down 0.3 percentage points from the previous month’s forecast. In 2018, the panel sees M2 growth of 10.6%.

Author: Ricard Torné, Lead Economist

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China Money Chart

China Money March 2017

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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