China economy: new bank loans in February fall less than expected, as ‘real financing demand is very strong’

New loans total 1.36 trillion yuan (US$209 billion), surpassing analysts’ forecasts for 950 billion yuan

February M2 money supply growth accelerates to 10.1 per cent from a year earlier, well above forecast for 9.4 per cent

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Chinese banks extended 1.36 trillion yuan (US$208.7 billion) in new local-currency loans in February. Photo: Reuters

Published: 7:52pm, 10 Mar 2021Updated: 7:52pm, 10 Mar 2021

New bank lending in China fell less than expected in February from January amid efforts by the central bank to cool credit growth to contain debt risks while maintaining support for ailing small firms.

Chinese banks extended 1.36 trillion yuan (US$208.7 billion) in new local-currency loans in February, down from a record 3.58 trillion yuan in January but still beating analyst expectations, according to data released by the People’s Bank of China (PBOC) on Wednesday.

Analysts polled by Reuters had predicted 950 billion yuan worth of new yuan loans in February, compared with 905.7 billion yuan a year earlier.

“Credit supply was stronger than expected,” Industrial Securities analyst Luo Yunong said. “The central bank has tightened credit at the margin, but real financing demand is very strong.”

China’s central bank has pledged to stabilise the country’s overall debt level, which jumped last year due to the government’s economic stimulus measures, but has said it will avoid a sudden policy shift and will continue to support ailing small firms.