China’s credit growth slowdown stabilised

The slowdown in credit growth stabilised in May as policymakers in China tried to avoid sharp policy turns. In May, money supply M2 increased by 8.35% y/y, matching the pace in April. Aggregate financing rose by 11% y/y, the slowest pace since February 2020. Newly increased aggregate financing in May was RMB 1.92tn, barely changed from April.

The slowdown in credit growth stabilized in May as policymakers in China tried to avoid sharp policy turns.

China’s aggregate financing measures financial institutions’ overall funding to the real economy. It is a leading indicator for China’s investment driven economy.

Further data and analysis on China’s economy is available on the CEIC China Economy in a Snapshot – Q2 2021 report.