China's credit growth remained robust in September amid recovery

Published Wed, Oct 14, 2020 · 12:14 PM

[BEIJING] China's credit continued to grow robustly in September, reflecting government efforts to add stimulus and stronger demand as the economic recovery continues.

Aggregate financing was 3.48 trillion yuan (S$701.7 billion), the People's Bank of China said on Wednesday, higher than the median estimate by economists. That compares to 3.58 trillion yuan in August and 2.51 trillion in September last year.

Financial institutions offered 1.9 trillion yuan of new loans in the month, higher than estimates of 1.7 trillion yuan.

China's economic recovery momentum remained solid in the month, with activity in both manufacturing and services sector continuing to strengthen. Policy makers are seeking to normalize monetary policy, and will aim to fine-tune it to be more precise and targeted.

"The recovery in fixed investment growth in recent months suggests loan demand might have stayed strong," Goldman Sachs Group economists led by Maggie Wei wrote in a report before the data release. "We expect the total social financing flows to reach 3.3 trillion yuan in September, on the back of our expectation of higher new RMB loans and continued issuance of government bonds during the month." "Credit growth might edge up on strong government bond issuances, but it should be around its peak as well," Larry Hu, chief China economist at Macquarie Bank, wrote in a note before the data.

China's overall liquidity is reasonable and ample, while credit and social financing are growing at a reasonable pace as well, said Ruan Jianhong, head of the statistics department at the central bank.

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