(Bloomberg) -- China’s credit growth picked up in November, boosted by faster sales of corporate and government bonds and a slight easing of property-related lending.
- Aggregate financing was 2.61 trillion yuan ($411 billion) last month, the People’s Bank of China said Thursday, up from 1.59 trillion yuan in October and compared with 2.1 trillion yuan in November last year.
- Financial institutions offered 1.27 trillion yuan of new loans in the month, up from 826.2 billion yuan in October.
- The stock of outstanding credit grew 10.1% to 312 trillion yuan, up from 10% in each of the previous two months
Credit growth may be starting to pick up after the pace of expansion slowed almost continually since late 2020 as authorities reined in borrowing to reduce financial risks. The PBOC recently signaled an easing shift with its decision to cut banks’ reserve requirement ratio and inject 1.2 trillion yuan of liquidity into the economy.
New property loans increased about 200 billion yuan from a year ago in November, Financial News, a newspaper backed by the central bank, reported this week. Following the release of credit data last month, the PBOC issued a rare statement highlighting that there was 37.7 trillion yuan of outstanding home mortgages in October, up from 37.4 trillion yuan in September.
“The credit cycle is on the cusp of a new upturn, which could end the policy-induced derating in the stock market,” said Larry Hu, head of China economics at Macquarie Group Ltd. in a note before the data release. However, easing of monetary and fiscal policy next year “would be still gradual and it’s too early to loosen the controls on property and local government debt,” he said.
Other details
- Broad M2 money supply grew 8.5%, down from 8.7%
- Shadow banking -- comprising entrusted loans, trust loans and undiscounted banker’s acceptances -- fell 254 billion yuan, down for a 10th straight month
(Updates with more details)
©2021 Bloomberg L.P.
Advertisement