Data released on Friday by the People's Bank of China showed a higher-than-expected increase in the amount of new loans made by Chinese banks in yuan during December, with the figures exceeding market expectations significantly.
According to the data, the value of new loans in China reached 990 billion yuan in December, which was higher than the forecast of 890 billion yuan. This reading was also much higher than the new loans provided by Chinese banks in November, which amounted to 580 billion yuan.
It is worth noting that there is a direct relationship between the amount of borrowing and spending, as consumers and companies tend to seek credit and increase borrowing when they are confident in their future financial situation and feel comfortable spending money. This typically reflects on economic activity and growth.
At the same time, data from the People's Bank of China showed that the broad money supply (M2) only increased by 7.3% in December compared to the same month last year. This matched market expectations, which had forecasted an increase of the same rate. The previous reading for November recorded a growth of 7.1%.
