This is very weak but temporary owing to the COVID rip. Still, it means the growth rebound ain’t coming any time soon given transmission lags. Goldman wraps the December Chinese credit data.
Bottom line:
December credit data were mixed. Total RMB loans surprised the market to the upside and showed broad-based improvement – both mortgages and corporate medium to long term loan growth increased in December. Property policy easing after the “16 measures to support the property sector” and the accommodative monetary policy stance (the PBOC delivered the 25bp RRR cut in early December) likely both contributed to the acceleration in RMB loan growth. On the other hand, total social financing and M2 growth missed expectations and decelerated from November. Very weak corporate bond net issuance due to the bond market repricing around wealth management product redemption and liquidity concerns dragged down overall total social financing growth. The deceleration in M2 growth was likely due to the dissipation of one-off factors (PBOC stated that commercial banks converted some FX to RMB in November) and smaller balances of PSL. In addition, PBOC and CBIRC jointly held a meeting with major policy and commercial banks today (January 10th), urging banks to strengthen financial support to the real economy, and in particular to the property sector.
