China’s yuan-denominated loans increased by an impressive 13.27 trillion yuan (approximately $1.86 trillion) in the first half of 2024, according to data released by the People’s Bank of China on Friday. This significant growth reflects the country’s ongoing efforts to stimulate economic activity and support the financial needs of businesses and consumers.
The M2 money supply, a broad measure encompassing cash in circulation and all deposits, rose by 6.2 percent year-on-year to reach 305.02 trillion yuan by the end of June. The expansion of the money supply indicates enhanced liquidity in the financial system, facilitating investment and consumption across various sectors.
However, newly added total social financing—a comprehensive measure of funds provided to the real economy from the financial system—stood at 18.1 trillion yuan in the first half of the year. This figure represents a decrease of 3.45 trillion yuan compared to the same period in 2023, suggesting a nuanced shift in the financing landscape.
Wen Bin, chief economist at China Minsheng Bank, commented on these trends, stating, “Driven by China’s ‘new economy’ and external demand, investment into the manufacturing industry is booming, which supports credit growth.” The surge in manufacturing investment underscores the country’s focus on revitalizing its industrial sector and boosting export capacity.
The increase in yuan loans and the growth of the M2 money supply highlight the proactive measures taken by financial institutions to bolster economic development. As China continues to navigate global economic dynamics, these indicators offer insights into its monetary policy and economic priorities for the remainder of the year.
Reference(s):
cgtn.com
