China Money October 2019


China: New yuan loans fall to 22-month low in October

November 11, 2019

In October, Chinese banks distributed CNY 661 billion (USD 94.6 billion) in new yuan loans, well below the CNY 1.69 trillion recorded in September and the CNY 800 billion that market analysts had expected. The print was the lowest reading since December 2017. In the 12 months up to October, new yuan loans totaled CNY 16.6 trillion (12 months to September: CNY 16.7 trillion).

Meanwhile, annual growth in M2—the broadest measure of money supply in China—stabilized at September’s 8.4% in October. The print matched the result that market analysts had expected.

Total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—plummeted from CNY 2.27 trillion in September to CNY 619 billion in October. Market analysts had expected a softer decline in TSF to CNY 1.0 trillion.

FocusEconomics Consensus Forecast participants expect M2 to expand 8.4% in 2020, which is unchanged from last month’s forecast. In 2021, the panel also sees M2 growth of 8.1%.

Author: Ricard Torné, Lead Economist

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China Money Chart

China Money October 2019

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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