China Money December 2015


China: New loans moderate further in December and growth in M2 moderates

January 14, 2016

New yuan loans totaled CNY 598 billion (USD 92.7 billion) in December, which came in below the CNY 709 billion registered in the previous month. December’s reading undershot the CNY 700 billion the markets had expected. In 2015, new yuan loans totaled CNY 11.7 trillion (2014: CNY 9.8 trillion).

Total social financing—a broader measure of liquidity in the economy that includes loans, bonds and other non-traditional instruments—increased from CNY 1.0 trillion in November to CNY 1.8 trillion in December. The reading was above the CNY 1.1 trillion the markets had expected.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—inched down from 13.7% in November to 13.3% in December, undershooting market expectations of 13.6%.

FocusEconomics Consensus Forecast participants expect M2 to expand 11.9% in 2016, which is up 0.1 percentage points over the previous month’s forecast. In 2017, the panel sees M2 growth of 10.8%.

Author: Ricard Torné, Lead Economist

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China Money Chart

China Money December 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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