Lending in China rose sharply in November

The broad measure of lending in China rose most sharply since March after the government poured money into the financial system to support the economy. This causes concern that the expansion may depend on too many debts. The lending increased to 1.74 trillion CNY (252 billion USD) in November against the average forecast for 1.1 trillion CNY. For comparison, in October the value was 896.3 billion CNY.

The new loans are rising from 651.3 billion CNY to 794.6 billion CNY, bolstered by growth in loans. Meanwhile, the broad measure of money supply M2 increased by 11.4% yoy, after last month recorded 11.6% growth.

The position of the People’s Bank of China will become stricter in the near future. The authorities are concerned about the risks of a bubble in the property market, debt and commodities. The private investment recovered slightly. Rebound is not strong enough to offset the slowdown in the property market, which will weigh on the outlook for growth next year.

The jump in new loans comes amid signs of further stabilization of the Chinese economy. The medium and long term loans to households increased by 569.2 billion CNY in November, which is over two-thirds of all new loans.

The foreign currency deposits increased by 11.4% yoy, the growth is twice bigger than in October (4.8%).

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