China persists in 'wringing the water' from financial data
China's financial data for July exhibited stability, indicating a continuous transformation and upgrading of the economy. Although the growth of financial aggregates is decelerating, the focus is now on advancing towards high-quality development.
TroibNews 
China's financial data for July indicates a period of stability, showcasing the ongoing transformation and upgrading of the economy. While the overall growth of financial aggregates is decelerating, the focus is shifting towards high-quality development.
Data released by the central bank on Tuesday highlights that yuan-denominated loans in China rose by 13.53 trillion yuan (approximately $1.89 trillion) in the first seven months of the year.
Wen Bin, chief economist at China Minsheng Bank, commented that the data demonstrates a seasonal decline. He remarked that this will have the effect of "wringing the water" – eliminating bias – from the financial data in the short term. This adjustment is anticipated to enhance the authenticity of the data and foster positive interactions within the financial economy.
By the end of July, the broad money supply (M2) had increased by 6.3 percent year on year, reaching 303.31 trillion yuan. In contrast, the narrow money supply (M1), which includes cash in circulation and demand deposits, amounted to 63.23 trillion yuan, reflecting a 6.6 percent year-on-year decline.
Ming Ming, chief economist at CITIC Securities, pointed out that the removal of bias has contributed to a decline in the growth rate of the money supply. However, he noted that financial support for entities is becoming more efficient. CITIC Securities forecasts that credit growth this year will be lower than last year's, with credit extension entering a new normal characterized by "low aggregate volume but optimized structure."
In terms of future financing needs, there is an expectation for increased demand. Zhou Maohua, a researcher at the Financial Market Department of China Everbright Bank, believes that forthcoming economic policies will prioritize improving living standards and boosting consumption. As consumption rebounds, the economic cycle is expected to stabilize, leading to new demands for effective financing.
(With inputs from CAIJING.COM)
Alejandro Jose Martinez contributed to this report for TROIB News
Data released by the central bank on Tuesday highlights that yuan-denominated loans in China rose by 13.53 trillion yuan (approximately $1.89 trillion) in the first seven months of the year.
Wen Bin, chief economist at China Minsheng Bank, commented that the data demonstrates a seasonal decline. He remarked that this will have the effect of "wringing the water" – eliminating bias – from the financial data in the short term. This adjustment is anticipated to enhance the authenticity of the data and foster positive interactions within the financial economy.
By the end of July, the broad money supply (M2) had increased by 6.3 percent year on year, reaching 303.31 trillion yuan. In contrast, the narrow money supply (M1), which includes cash in circulation and demand deposits, amounted to 63.23 trillion yuan, reflecting a 6.6 percent year-on-year decline.
Ming Ming, chief economist at CITIC Securities, pointed out that the removal of bias has contributed to a decline in the growth rate of the money supply. However, he noted that financial support for entities is becoming more efficient. CITIC Securities forecasts that credit growth this year will be lower than last year's, with credit extension entering a new normal characterized by "low aggregate volume but optimized structure."
In terms of future financing needs, there is an expectation for increased demand. Zhou Maohua, a researcher at the Financial Market Department of China Everbright Bank, believes that forthcoming economic policies will prioritize improving living standards and boosting consumption. As consumption rebounds, the economic cycle is expected to stabilize, leading to new demands for effective financing.
(With inputs from CAIJING.COM)
Alejandro Jose Martinez contributed to this report for TROIB News
