After the lifting of pandemic controls, Yuan loans extended by Chinese banks likely surged to a record high in January, as the central bank moved to shore up growth in the world's second-biggest economy.
In a survey of 23 economists, they estimated that they issued 4.00 trillion yuan $590.14 billion in net new yuan loans last month, nearly tripled the 1.4 trillion yuan issued in December.
That would be higher than the record 3.98 trillion yuan issued in January 2022.
In 2022, China's new bank lending hit a new record 21.31 trillion yuan, a rise from 19.95 trillion yuan in 2021, the previous record.
Monetary policy could be a strong start to the year, so as to prepare the way for a strong start to the economy for the new administration, analysts at Citi said in a note.
The economy grew 3 per cent in 2022, much less than the official target of around 5.5 per cent. It was one of its worst rates in nearly a century. Growth is expected to recover to around 5 per cent in 2023, after Beijing ditched harsh COVID 19 restrictions in early December.
The central bank has increased support for manufacturers and small businesses this year, and has pledged to take measures to boost market confidence.
The central bank cut the reserve requirement ratio for banks on December 5, making it the second such move in 2022, releasing 500 billion yuan in long-term liquidity.
On Jan. 31, outstanding loans were likely to be 11.0 per cent higher than a year earlier, compared with 11.1 per cent growth seen in the year to December 31, according to the poll. At the end of January, Broad M 2 money supply was likely to be 11.6 per cent higher than a year earlier, compared to the 11.8 per cent annual growth seen a month earlier.
Finance ministry data shows that China's local governments issued a net 4.04 trillion yuan in special bonds in 2022 to spur investment and support the economy.
Last year, the cabinet told local governments to sell more than 500 billion yuan in special bonds under quotas carried over from previous years on top of the 2022 quota of 3.65 trillion yuan.
If there is an increase in government bond issuance, it could boost the total social financing TSF, a broad measure of credit and liquidity. On December 31st, outstanding TSF was 9.6 per cent higher than a year earlier, growing slower than the 10.0 per cent annual rate seen in the previous month.
The January new TSF was expected to be 5.40 trillion yuan, a rise from 1.31 trillion yuan in December, according to the median estimate in the poll.