China's October new bank loans shrink for third time this year as credit demand weakens
SPY•China’s new yuan loans shrank by 100 billion yuan in October, the third monthly decline this year, while outstanding loan growth fell to a record low of 4.7%. M2 money supply growth slowed to 7.1%, its lowest rate in 19 months.
1. Loans decline again
China’s new yuan loans shrank by 100 billion yuan in October, following declines in April and July. Analysts had expected loans to rise by 20 billion yuan, compared with 220 billion yuan a year earlier. Lending totaled 11.42 trillion yuan in the first 10 months of the year, down from 14.97 trillion yuan in the same period last year.
2. Money supply growth slows
Outstanding yuan loans grew 4.7% year over year in October, a record low, while M2 money supply growth slowed to 7.1%, its lowest pace in 19 months. M1 growth accelerated to 4.4% from 3.2% in September, and total social financing growth rose to 7.2% from 7.1%. October is typically a weak month for new credit demand, following quarter-end lending and a week-long national holiday.
