Chinese M2 Increases Despite Stated Policy to 'Slow Down' Credit Expansion
EDIT: $1.1 trillion is actually in Yuan. Apologize for our inability to change headline ; would break link at this point. 1.1 trillion USD is around 1.5 trillion yuan. And the inverse ratio is true for 1.1 T Yuan. Do the math or Google it kids.
China's much publicized attempts to reign in leverage have had no effect on Money growth. Despite talking commodity markets like iron lower, the financial community actually increased loans in April. M2 as a measure of growth went up, and to us saying "credit growth" is like saying "inflation is up". We will see if the PBOC talk is any more than just a Fed jawboming specs out of frothy markets.
- The PBOC reported Friday credit expanded 1.39 trillion yuan ($201 billion), and an an increase of 2.12 trillion in March
- New loans rose to 1.1 trillion yuan, more than the estimated 815 billion yuan
- The broad M2 money supply increased 10.5 percent, less than the 10.8 percent forecast
Last week, Chinese credit growth exceeded estimates despite recent regulatory curbs aimed at reining in leverage.
"The government doesn’t really want to clamp down on the type of credit that supports the economy most," said Yao Wei, chief China economist at Societe Generale SA
Also....
BBG-Chinese President Xi Jinping detailed the nation’s plan to lead globalization efforts as part of the Silk Belt and Road Initiative in a speech to world leaders at a forum in Beijing on Sunday.
Xi also upped China’s pledged contribution to funds associated with a massive build-out of infrastructure and other investments throughout Asia, Europe, and Africa to better connect the world’s second-biggest economy with the rest of the world.
China also plans to import more energy from the U.S. to meet its domestic needs.
However, in a sign that cooperation between China and its neighbors still remains an aspirational goal, North Korea conducted a ballistic missile test shortly before Xi’s speech.
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