China’s Credit Growth Shows Signs of Peaking in November

(Bloomberg) -- China’s credit remained robust in November, though growth eased slightly amid the economy’s strong recovery.

• Aggregate financing was 2.13 trillion yuan ($326 billion) last month, the People’s Bank of China said Wednesday, higher than the median forecast of 2.08 trillion yuan
• Financial institutions offered 1.43 trillion yuan of new loans in the month, slightly lower than estimates of 1.45 trillion yuan

Key Insights

Get More

• Broad M2 money supply accelerated to 10.7% from 10.5% in October
• Net financing of corporate bonds fell sharply from a month earlier, while government bond issuance also decreased from October’s level
• Shadow banking -- comprising entrusted loans, trust loans, and undiscounted bankers acceptances -- fell by 204 billion yuan in the month

What Bloomberg Economics Says...

Regarding the sharp drop in corporate bond issuance and a retreat in long-term corporate loans as a share of the total, “these aren’t likely to damp growth near term. But we suspect they will catch the eye of the People’s Bank of China -- possibly prompting more steps to smooth funding channels as it begins the process of policy normalization.”

-- David Qu, China economist

For the full report, click here.

©2020 Bloomberg L.P.