Failing credit pushes China nose down into hard landing

Monday, 14 March 2022

Those looking for China to carry the global economy in the months ahead are in for a nasty surprise. With its housing market in a deep freeze, Chinese credit has entered classic debt-deflation dynamics and, despite the best efforts stimulate to date, credit is pushing on a string.

February numbers were very poor following the stellar January. One should always wait for the combined number given LNY distortions. Total Social Financing was a lousy 1,19tr yuan, banks made up 1.23tr yuan of that meaning shadow credit contracted:

Year on year growth for February tumbled to -30.4%. The 3MMA is fading away:

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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.