Total Social Financing (TSF) in China jumped in January which really wasn’t surprising given that the figure captures much of the central bank and whatever it does – which was a lot in January. Loan growth, too, surged giving the mainstream a desperate boost even if these estimates don’t mean what everyone seems to think. This is the typical response so far:
Chinese banks armed with fresh lending quotas extended a record 2.51 trillion yuan ($385.40 billion) of new loans in January, far more than markets had expected, suggesting Beijing is keeping monetary policy loose to counter a protracted economic slowdown.
You can see just how “typical” as it is the same that accompanies every other time TSF rises substantially along with new loans. From Marchlast year:
Chinese banks extended 1.02 trillion yuan of new loans in February, well above market expectations, while growth in broad money supply quickened, taking some heat off the central bank as it seeks to boost flagging economic growth.
Economists polled by Reuters had expected new local-currency loans to fall to 750 billion yuan in February from 1.47 trillion yuan in January, which marked a lending surge not seen since mid-2009.
And from the WSJ last March:
China posted stronger-than expected lending figures for February, reflecting an easing bias by the central bank in an effort to stabilize economic growth.
Chinese banks issued 1.02 trillion yuan ($163 billion) of new yuan loans in February, down from 1.47 trillion yuan in January but far above economists’ expectations of 760 billion yuan, data from the People’s Bank of China showed Thursday.
“The recent pickup in bank lending likely reflects a behind-the-scenes loosening of lending restrictions,” such as bank lending quotas, Julian Evans-Pritchard of Capital Economics said in a note to clients.
June 2014:
The latest PBOC lending and money data show that the central bank’s selective easing policy is working. As a result of recent policy easing, the broadest measure of money supply, M2, and bank lending were both up in May. Though some shadow-banking financing activities like trust loans were squeezed by tighter regulation, credit conditions are sufficient to stabilize China’s economic growth in the short term.
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