Chinese credit off to the races

Again. New yuan loans for May were out last night and it’s game on for Chinese credit. Total social financing remains very strong at 3.19tr yuan of which only 1.48tr was banks:

Shadow finance is back although that growth is being exaggerated by tearaway bond issuance:

M2 has jumped to 11.1%

The 3MMA for new loans is through the roof:

So is the rolling annual:

And broad credit has hit takeoff at 12.5%:

The marginal impact of credit will diminish even further given a lot of this is just to keep zombie firms alive but enough of it is for building more useless crap.

Bullish for iron ore in H2, 2020.

David Llewellyn-Smith
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