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China Credit Growth Beats Estimates as Economy Maintains Pace




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(Bloomberg) — China’s broadest measure of new credit exceeded estimates and loan growth picked up, signaling that the economy remains robust into the second quarter.

  • Aggregate financing stood at 1.56 trillion yuan ($246 billion) in April, the People’s Bank of China said Friday, exceeding all but one estimate in Bloomberg’s survey and the 1.33 trillion yuan reading from March
  • New yuan loans stood at 1.18 trillion yuan, versus a projected 1.1 trillion yuan and 1.12 trillion yuan the prior month
  • The broad M2 money supply rose 8.3 percent, compared with a forecast 8.5 percent growth

The robust lending signals sustained growth momentum in the second quarter thanks to resilient domestic demand, even amid a campaign to curb excessive lending. Policy tweaks including a recent reserve-requirement ratio cut that encourages banks to lend more have buoyed sentiment, at a time when U.S.-China trade tensions threaten to escalate.

“The data in general are not a surprise,” said David Qu, an economist at Australia & New Zealand Banking Group Ltd. in Shanghai. “The RRR cut in April hasn’t shown much impact as the time span is too short. This is still a neutral monetary policy stance, and the PBOC could possibly conduct further RRR cuts.”

Elsewhere in the report, measures of shadow banking declined:

  • Entrusted loans, organized by a bank between borrowers and lenders, fell by 148 billion yuan
  • Trust loans, made by trust companies to finance infrastructure and real estate, dropped by 9 billion yuan
  • Bankers’ acceptance, short-term credit issued by a company with a bank’s guarantee, rose by 145 billion yuan

The total outstanding aggregate financing rose to 181.4 trillion yuan in April.

“Funding for growth continues to be sufficient to achieve policy targets and so any deceleration will be gradual,” said Dariusz Kowalczyk, a senior emerging-market strategist at Credit Agricole SA in Hong Kong. “The M2 money supply growth rate remained near record lows and was well below the 8.5 percent on-year consensus, highlighting continued success in dealing with risks in the financial system.”

–With assistance from James Mayger and Miao Han

To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at, Xiaoqing Pi in Beijing at

To contact the editors responsible for this story: Jeffrey Black at, Jeff Kearns, Emma O’Brien

©2018 Bloomberg L.P.

With assistance from Yinan Zhao, Xiaoqing Pi

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