Overnight China released its latest monthly credit data which showed that even as China is trying to choke off its shadow banking sector, something we showed most recently last month when we discussed the biggest crash in net bond issuance on record, credit to the broader economy continues to flow, although it comes as M2 crashed to a new all time low and has prompted some nervous analysts to say that even this “crazy” loan creation number may not be enough.
The details: in June Chinese banks extended 1.54 trillion yuan ($226.9 billion) in net new yuan loans, well above analysts’ expectations of 1.2 trillion yuan, and up from 1.11 trillion in May (which was also higher than the 1 trillion expected). Outstanding yuan loans grew by 12.9%, unchanged from a month ago, and more than the forecast 12.7% increase. Household loans, mostly mortgages, rose to 738.4 billion yuan in June from 610.6 billion yuan in May; these accounted for 48% of total new loans last month, down from 55% in May.
This post was published at Zero Hedge on Jul 12, 2017.