China Money September 2018


China: Policy easing boosts credit data in September

October 17, 2018

In September, Chinese banks distributed CNY 1.38 trillion (USD 199 billion) in new yuan loans, up from the CNY 1.28 trillion distributed in August and slightly above market expectations of CNY 1.35 trillion. In the 12 months up to September, new yuan loans totaled CNY 15.5 trillion (12 months up to August: CNY 15.4 trillion).

Meanwhile, annual growth in M2—the broadest measure of money supply in China—inched up to 8.3% in September from August’s 8.2%. The reading was in line with market expectations.

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 CNY 1.52 trillion in August to CNY 1.55 trillion in September.

The improvement in credit data mostly reflects recent easing measures adopted by Chinese authorities.

FocusEconomics Consensus Forecast participants expect M2 to expand 8.5% in 2019, which is down 0.1 percentage points from last month’s forecast. In 2020, the panel sees M2 growth of 8.4%.


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China Money Chart

China Money September 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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