According to the report from the People's Bank of China (PBoC), in January, Chinese banks provided new loans in yuan in the amount of 4,920 trillion yuan (a record high since comparable records began in 2004). Thus, credit growth accelerated sharply compared to December (1.170 trillion yuan). Economists had expected lending to grow by 4.5 trillion yuan. The latest increase was caused by attempts by the Chinese authorities to support the economy, and as loans tend to rise in the beginning of the year as banks try to get higher-quality customers and win market share. Chinese banks doled out a record 22.75 trillion yuan in new loans in 2023, up 6.8% from 2022. But loan growth year-on-year fell to its lowest in more than 20 years in December.
Meanwhile, total social financing grew by 6.5 trillion yuan (a record high) compared to an increase of 1.94 trillion yuan in December. Consensus estimates suggested an increase by 5.50 trillion yuan.
The PBoC said that in January, M2, the widest measure of money supply, rose by 8.7% per annum, slowing compared to December (+9.0%), and falling below economists' forecasts (+9.3%). Outstanding loans in yuan rose by 10.4% per annum, as expected, after an increase of 10.6% in December.
China's central bank said yesterday it would maintain policy flexibility and precision to boost domestic demand while maintaining price stability amid signs of an uneven economic recovery and ongoing deflationary risks.