China credit signals more commodity pain

The most important data release in the world for Australia was out Friday night. It is not well-followed, is even more poorly understood and is not travelling very well.

It is China’s new yuan loans monthly credit release and it appeared to rise impressively to total new credit of $2.05 trillion in January. Even more impressively, the bank lending component was at it highest ever at 1.47 trillion yuan, galloping through analyst forecasts of 1.35 trillion.

But a little context reveals that these figures are not only disappointing but troubling for those dependent upon credit-charged growth in China. The charts explain. Here is the month-on-month aggregate:

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.