China’s money supply recovers – Chinadaily.com.cn

China’s broad money supply growth rebounded in September, a sign that the introduction of gradual measures has begun to revive market confidence. However, funding activity remains subdued, official data showed on Monday.

China’s broad money supply M2 stood at 309.48 trillion yuan ($43.71 trillion) at the end of last month, up 6.8 percent year-on-year. Growth rose from 6.3 percent in the previous month, the People’s Bank of China, the country’s central bank, said on Monday.

Zhou Maohua, a researcher at China Everbright Bank, said the stabilization of M2 growth shows that economic activity has recovered and falling financing costs have boosted companies’ propensity to invest. However, overall M2 growth remained low, suggesting that the housing downturn continues to weigh on credit expansion.

The PBOC said total social financing – the total amount of financing of the real economy – was 25.66 trillion yuan in the January-September period, down 3.68 trillion yuan compared to the same period last year.

The country’s total outstanding social financing stood at 402.19 trillion yuan at the end of September, up 8 percent year-on-year, compared with 8.1 percent at the end of August.

The central bank also said that yuan-denominated loans increased by 16.02 trillion yuan in the January-September period, compared with 14.43 trillion yuan in the January-August period.