China's yuan-denominated loans surged by 13.27 trillion yuan ($1.86 trillion) in the first half of 2024, according to data released by the People's Bank of China on Friday.
The M2 money supply, which encompasses cash in circulation and all deposits, increased by 6.2 percent year-on-year, reaching 305.02 trillion yuan by the end of June. This growth highlights the central bank's efforts to support the economy amidst global uncertainties.
Despite the rise in yuan loans, newly added total social financing—the metric that measures the funds the real economy receives from the financial system—declined by 3.45 trillion yuan compared to the same period in 2023, settling at 18.1 trillion yuan for H1 2024.
Wen Bin, chief economist at China Minsheng Bank, attributes the robust credit growth to China's "new economy" initiatives and sustained external demand. \"Investment into the manufacturing industry is booming, which supports credit growth,\" Wen explained in a recent note.
This surge in yuan-denominated loans underscores China's strategic focus on strengthening its manufacturing sector and leveraging external demand to drive economic resilience and growth in the first half of the year.
Reference(s):
cgtn.com
