China Money December 2017


China: M2 growth falls to all-time low in December

January 12, 2018

Chinese banks extended CNY 584 billion (USD 90 billion) in new yuan loans in December, well below November’s CNY 1.12 trillion. The print undershot the CNY 1.10 trillion markets had expected and was the lowest reading since April 2016. In the full year 2017, new yuan loans totaled CNY 13.5 trillion (2016: 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—rose from the CNY 17.8 trillion in 2016 to CNY 19.4 trillion in 2017.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—fell from November’s 9.1% to 8.2% in December. The reading was the lowest print on record and undershot the 9.1% that market analysts had expected.

FocusEconomics Consensus Forecast participants expect M2 to expand 9.3%, in 2018 which is unchanged from last month’s forecast. In 2019, the panel sees M2 growth of 9.4%.


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China Money Chart

China Money December 2017 0

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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