Chinese credit growth picks up in August, analysts say

The flow of credit in the People’s Republic of China accelerated in August, the latest figures published by Beijing revealed according to analysts.

So-called ‘total social financing’ continued growing at a 12% year-on-year clip in August, with a net increase of 1080bn yuan following a rise of 719bn in July.

However, if one takes into account that local governments have been forced by authorities to sell bonds in order to raise funds – as they can no longer do so from banks – then credit growth has accelerated to a 13.3% year-on-year clip, Mark Williams, Chief China economist at Capital Economics, said in a research report e-mailed to clients.

“In other words, both lending to the real economy and broader credit are accelerating – exactly as we’d expected after the shift to policy easing. This will raise questions about the level of debt in the economy, but as it feeds through to stronger economic activity, it should at least calm concerns about a hard landing,” Williams said.