China Money March 2018


China: New yuan loans pick up in March

April 13, 2018

Chinese banks distributed CNY 1.12 trillion (USD 178 billion) in new yuan loans, up from February’s CNY 839 billion, but falling shy of market expectations of CNY 1.20 trillion. In the 12 months up to March, new yuan loans totaled CNY 14.2 trillion (12 months up to February: CNY 14.1 trillion). The boost in new yuan loans in March could be attributed to growth in more traditional bank loans as Chinese regulators seek to crack down on the pervasive shadow banking.

Total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—grew from CNY 1.17 trillion in February to CNY 1.33 trillion in March.

Meanwhile, annual growth in M2—the broadest measure of money supply in China—moderated from February’s 8.8% to 8.2% in March. The reading came in below the 8.9% that market analysts had expected and represented the lowest print since the current series began in 1996.

China M2 Money Supply Forecast

FocusEconomics Consensus Forecast participants expect M2 to expand 8.9%, in 2018 which is down 0.1 percentage points from last month’s forecast. In 2019, the panel sees M2 growth of 8.8%.


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China Money Chart

China Money March 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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