China halts credit growth

Monday 10 March 2014

China released its February lending data overnight and the news was again poor. February bank and non-bank lending plunged to 644 billion yuan and 405 billion yuan respectively. M2 rose a touch to 13.3%:

To get an idea of what this really means given the various seasonal issues, we can add January and February together and compare year on year with 2013 and the result is 0.45% growth.

There was compression right across the shadow sector. From Soc Gen:

China has stopped its credit growth machine.

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.