China’s central bank released data on Tuesday (10th) showing that as the central bank continues to support the economy affected by the new crown epidemic, China’s new bank loans in December last year unexpectedly grew compared with the previous month, and last year’s loans hit a record high.
According to the data released by the People’s Bank of China, the new RMB loans of Chinese banks in December last year were RMB 1.4 trillion (the following units are the same), not only higher than the 1.21 trillion in November last year, but also higher than the 1.13 trillion in the same period of the previous year. That beat analysts’ forecast of 1.1 trillion yuan.
Household loans, including mortgages, fell to 175.3 billion yuan in December from 262.7 billion yuan in November, while corporate loans climbed to 1.26 trillion yuan in December from 883.7 billion yuan in November, China’s central bank data showed. . New bank loans reached a record 21.31 trillion yuan last year, higher than the record 19.95 trillion yuan the year before.
Zhou Hao, chief economist at Guotai Junan International, said China’s new loans in December exceeded expectations, but total financing fell short of expectations. Market expectations were modest as the resurgence of the coronavirus should dampen lending activity.
Zhou Hao said that investors’ attention is now turning to the credit expansion data for the first month of this year. Growth prospects were further boosted by higher-than-expected new loans in December and the prospect of large-scale loan deferrals early this year.
China’s economy was hit hard last year by the coronavirus lockdown and slowing global demand, and the country’s leaders have recently pledged to increase economic support at home. The country is now grappling with surging case numbers after the strict zero-clearing measures were abruptly lifted in December. The People’s Bank of China has pledged to make its policies “simplified and powerful” this year to support the economy by keeping liquidity reasonably ample and lower corporate funding costs.
In addition, the data released by the People’s Bank of China on the same day also showed that the M2 money supply increased by 11.8% in December last year, down 0.6 percentage points from the previous value of 12.4%, and lower than the expected 12.3%. Outstanding RMB loans rose 11.1 percent year-on-year in December, up from 11 percent in November last year and slightly higher than analysts’ forecast of an 11 percent growth.
China’s total social financing (TSF) increased by 9.6% year-on-year to 1.31 trillion in December last year, lower than the 10% year-on-year increase to 1.99 trillion in November last year, and not as good as Reuters analysts’ forecast of 1.6 trillion. .
The data is a broad measure of credit and liquidity in the economy and includes forms of off-balance-sheet financing that exist outside the traditional bank lending system, such as initial public offerings (IPOs), trust company loans and bond issuances.
