The People’s Bank of China (PBOC) has just released its latest raft of official data on money supply in the Chinese economy.
PBOC data indicates that as of the end of September the broad M2 money supply balance was 216.41 trillion yuan, for a YoY rise of 10.9%, and an acceleration of 0.5 percentage points compared to the end of the previous month, and 2.5 percentage points compared to the same period last year.
The M1 money supply balance was 60.23 trillion yuan, for a YoY rise of 8.1%, an acceleration of 0.1 percentage points compared to the end of the previous month, and 4.7 percentage points compared to the same period last year.
Total social financing for the first three quarters of 2020 was 29.62 trillion yuan, for an increase of 9.01 trillion yuan compared to the same period last year.
In the month of September total social financing was 3.48 trillion yuan, for an increase of 963.0 billion yuan compared to the same period last year.
As of the end of September outstanding total social financing was 280.07 trillion yuan, for a YoY rise of 13.5%, and an acceleration of 2.8 percentage points compared to the same period last year.
“In the first three quarters total social financing underwent structural optimisation and overall growth in volume” said Ruan Jianhong (阮健弘), head of PBOC’s statistical department, at a press conference held on 14 October.
Ruan highlighted three structural changes to credit extension in China in the first three quarters of 2020:
- Expansion in lending to the “real economy,” with renminbi loans to the real economy totalling 16.69 trillion yuan, 2.79 trillion yuan ahead of the figure for the same period last year and close to the full year 2019 figure of 16.88 trillion yuan.
- The real economy saw a major increase in direct financing via the bond and stock markets. In the first three quarters net enterprise bond financing was 4.1 trillion yuan, for an increase of 1.65 trillion yuan compared to the same period last year. Non-financial enterprise domestic equity financing was 609.9 billion yuan, for an increase of 375.6 billion yuan compared to the same period last year.
- In the first three quarters net government bond financing was 6.73 trillion yuan, for an increase of 2.74 trillion yuan compared to the same period last year.
Ruan further pointed out that enterprise loans are now mainly compared of medium and long-term maturities.
“In the first three quarters medium and long-term loans to the real economy were 11.85 trillion yuan, an amount which is 72.9% of all new lending…medium and long-term loans to enterprises increased 7.25 trillion yuan.”