China: Credit data is weak in July
In July, Chinese banks distributed CNY 260 billion in new yuan loans, down from June’s 2130 billion figure and well below market expectations. Money supply increased 6.3% compared to the same month of the previous year in July, which was above June’s 6.2% increase. Meanwhile, the stock of total social financing (TSF)—a broader measure of credit and liquidity in the economy that includes loans, bonds and other non-traditional instruments—increased 8.2% in the month (June: 8.1% yoy).
Soft domestic demand and the government’s regulatory push to fix artificially inflated loan data likely depressed the latest credit figures, and could continue to do so in coming months.