China Money February 2018


China: New yuan loans moderate in February from January's surge

March 9, 2018

Chinese banks extended CNY 839 billion (USD 132 billion) in new yuan loans in February, well below January’s all-time high of CNY 2.90 trillion. The print slightly undershot the CNY 900 billion markets had expected. In the 12 months up to February, new yuan loans totaled CNY 14.1 trillion (January: CNY 14.4 trillion). The slowdown in February reflects seasonal factors related to the Lunar New Year holidays and Chinese banks front-loading loans in January to gain market share.

Total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments— fell from January’s CNY 3.06 trillion to CNY 1.17 trillion in February.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—rose from January’s 8.6% to 8.8% in February. The reading came in slightly above the 8.7% that market analysts had expected.

China Money Supply M2 Forecast

FocusEconomics Consensus Forecast participants expect M2 to expand 9.0%, in 2018 which is unchanged from last month’s forecast. In 2019, the panel sees M2 growth of 8.9%.


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China Money Chart

China Money February 2018

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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