Chinese Lending Could Exceed 14 Trillion Yuan in 2018

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Domestic analysts expect China to maintain stable loan growth this year, after M2 money supply growth dipped to unprecedented lows in 2017.

Yan Ling (师闫), macroeconomic analyst with China Merchants Securities, said to 21st Century Business Herald that she expected total new lending to post a year-on-year increase of 12% to reach 14.5 trillion yuan in 2018.

According to Yan given that new loans for December are expected to have reached 800 billion yuan, the 2017 full year lending volume likely reached 13.7 trillion yuan, for growth of 12.9%.

Yan said that key factors supporting Chinese loan growth in 2018 will be the return of off-balance sheet loans to balance sheets, as well as indications from banks that demand for lending remains strong.

CITIC Securities fixed income chief analyst Ming Ming (明明) sees loan growth of 13 – 14% in 2018, as Chinese banks are prompted by regulators to make adjustments to better support the real economy in order to help satisfy growth targets.

According to Ming further loan expansion will be incumbent upon Chinese banks given that there is little likelihood of significant loosening in monetary policy this year.

Industrial Bank forecasts new lending of 13.6 – 14.1 trillion yuan in 2018, remaining roughly on par with new loans in 2017.

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