In the January-February period this year, China’s social financing amounted to RMB 8.06 trillion ($1.1 trillion), decreasing by RMB 1.1 trillion ($0.15 trillion) compared to the same period of last year, according to the People’s Bank of China (PBOC). The decline was mainly due to the sharp drop in financing in February.
In the first two months this year, new Chinese currency loans totaled RMB 6.37 trillion ($0.9 trillion), which signals stable development, but in February they came to just RMB 1.45 trillion ($201.5 billion), according to Reuters’ calculations, falling below expectations. Even the RRR cuts announced since early February have failed to provide support, at least so far.
On March 5, Chinese Premier Li Qiang delivered a report on the work of the Chinese government, stating that China will issue ultra-long-term special treasury bonds amounting to a value of RMB 1.0 trillion ($0.14 trillion) in 2024, which will bolster China’s financial data.
Economists have indicated that there is more room for China to cut the reserve ratio and interest rates, which would exert a positive impact on the credit index.