A noted earlier today, Chinese credit growth is slowing fast. Some interesting texture from Goldman:
July TSF flow and new CNY loans both came in below expectations, after both indicators surprised to the upside in June. Sequential growth of TSF stock moderated to 9.3% mom annualized sa in July from 11.1% in June, and overall RMB loans growth also decelerated to 8.8% month-over-month annualized, from 11.5% in June. M2 growth was also lower than market expectations and slowed from June.2.
Among major TSF components, RMB loans slowed meaningfully. Note that the RMB loans under TSF differs from the headline new RMB loans separately reported by the PBOC as the latter includes loans between financial institutions while the former only includes loans to the real economy. New RMB loans to the real economy were even lower than the headline new RMB loans. More specifically, the slowdown in RMB loan growth in July appeared broad-based: both corporate and household loan growth decelerated in July. Household short-term loans showed the biggest deceleration. After our adjustment for seasonality, household short-term loan growth slowed to 6.3% month-over-month annualized, from 15.3% in June. Corporate and government bond net issuance was lower on the back of the large amount of maturing bonds in the month. Trust and entrust loans continued to contract, although bank acceptance bills showed a small rebound in July after seasonal adjustment.
