China saw double-digit growth in loans to the real economy in 2022, as policymakers endeavoured to boost demand for funds amidst a renewed round of Covid lockdowns and heightened geopolitical tensions.
China’s total social financing stood at 344.21 trillion yuan as of the end of 2022, for a YoY rise of 9.6%, according to figures from the Chinese central bank’s “2022 Total Social Finance Increase Statistical Data Report” (2022年社会融资规模增量统计数据报告). Total social financing grew 32.01 trillion yuan in 2022, 668.8 billion yuan ahead of the figure for 2021.
The outstanding balance of renminbi loans for China’s real economy was 212.43 trillion yuan as of the end of 2022, for a YoY rise of 10.9%.
“The financial system provides strong support for the real economy,” said Ruan Jianhong (阮健弘), the head of PBOC’s statistical department.
Despite the double-digit growth in renminbi loans to the real economy, growth in Chinese bank credit still lagged well behind the rise in deposits.
In 2022 renminbi loans in China increased 21.31 trillion yuan, 1.36 trillion yuan ahead of the figure for 2021. In sharp contrast, renminbi deposits increased 26.26 trillion yuan, 6.59 trillion yuan ahead of the figure for 2021.
State-owned media highlighted the impact of “pressures including an ailing economy and insufficient effective demand for loans.”
Other channels of credit extension saw a lacklustre performance in 2022. As of the end of 2022 the outstanding balance of foreign currency loans to the real economy stood at 1.84 trillion yuan, for a YoY plunge of 17.4%. The entrusted loan balance was 11.24 trillion yuan, for a YoY rise of 3.4%; the trust loan balance was 3.75 trillion yuan, for a YoY decline of 14%, while the balance of undercounted bankers’ acceptances was 2.66 trillion yuan, for a drop of 11.6%.
The enterprise bond balance was 31.01 trillion yuan, for growth of just 3.6%. The government bond balance, however, grew 13.4% to hit 60.19 trillion yuan, while the non-financial enterprise domestic share balance was 10.64 trillion yuan, for YoY growth of 12.4%.
PBOC sought to drive funding 2022 with two cuts to the required reserve ratio, which it says provide over 1 trillion yuan in long-term liquidity.