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China: Growth in new loans and M2 moderates in December

January 15, 2015

New yuan loans totaled CNY 697 billion (USD 113 billion) in December, which was below the CNY 853 billion recorded in the previous month. The print undershot the CNY 880 billion market analysts had expected. In the full year 2014, new yuan loans totaled CNY 9.78 trillion (2013: CNY 8.88 trillion). Although the total amount of new lending was above the widely-reported goal of CNY 9.5 trillion, it fell short of the new Central Bank’s expected target of CNY 10.0 trillion set in the final two months of 2014.

Total social financing—a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments—jumped from CNY 1.15 trillion in November to CNY 1.69 trillion in December, which represented a six-month high. The print overshot the CNY 1.20 trillion that market analysts had expected. In the 12 months up to December, total social financing rose to its highest level in four months.

Annual M2 growth, the broadest measure of money supply in China, moderated from November’s 12.3% to 12.2% in December. The result came in under the 12.5% increase the market had expected and represented the slowest growth rate since March 2014. In addition, the reading was below the 13.0% target set for 2014.

FocusEconomics Consensus Forecast participants expect M2 to expand 12.3% in 2015, which is unchanged over the previous month’s forecast. In 2016, the panel sees M2 growth of 11.7%.


Author: Ricard Torné, Lead Economist

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China Money Chart


China Money December 2014

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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