What’s new: China’s credit growth slowed in October after months of strong rebound, mainly reflecting the week-long national holiday that halted business activities.
Chinese banks issued 689.8 billion yuan ($104.3 billion) of new loans in October, 28.5 billion yuan or 4.3% more than the same time last year but 60% less than in September.
Total social financing grew 1.42 trillion yuan, down 61% from the previous month. The figure is largely in line with the median forecast in a Caixin survey.
What’s the context: Bank lending in China usually slows in October because of the week-long national holiday starting Oct. 1. Despite the seasonal decline, credit growth accelerated on a year-on-year basis, suggesting persistent economic recovery, said Macquarie Group Ltd.’s Larry Hu.
M1 growth, a leading indicator of the economy, rose to a new high of 9.1% year-on-year in October since Jan 2018.
China’s central bank has been indicating normalization of monetary policy as the economy gradually recovers from the Covid-19 pandemic.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com).
