China: Credit keeps growing – ING

Sandeep Kanihama FXStreet Contributor

Iris Pang, economist at ING, notes that China’s M2 - a widely used gauge of credit expansion, increased to 8.4% year on year in September from 8.2% a month ago.

Key Quotes

“Renminbi loans grew by CNY 13.9 trillion in the third quarter, which is equivalent to around 14.5% of nominal GDP for the four quarters from 3Q18 to 2Q19.”

“Of all the items, the most eye-catching is the CNY 2 trillion increase in local government special bonds in the third quarter used to finance infrastructure projects. The quota for these bonds was only CNY 2 trillion, with this entire amount used in 3Q alone.”

“The substantial increase in local government bonds suggests that the economy has relied on infrastructure investments to support GDP growth.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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