China signals more credit tightening

Via Gordon Johnston at Vertical Research:

… in 2017 this number was +CNY667bn, in 2016 this number was +CNY2.4tn, in 2015 this number was +CNY739bn, in 2014 this number was +CNY157bn, and in 2013 this number was -CNY622bn.

Stated differently, this is the weakest start to the year since 2013 for (Jan. + Feb.). The point is, while this is just one indicator, and, at risk of stating the obvious, should not be the only metric considered when trying to ascertain the entire mosaic around China’s credit ambitions, in late-2014/early-2015 this measure did start to move aggressively higher, foretelling the sizeable tailwind that was right ahead for the global industrial sector (despite the overall bearish views that defined the industrial space at the time – i.e., it helped show, with a ~6-9 month lead-time, when the turn was happening).

The full text of this article is available to MacroBusiness subscribers

$1 for your first month, then:

$24.99 / month

$249 / year

Cancel at any time through our billing provider, Stripe

Share

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.