China's Bank Lending Increases In August

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China’s bank lending increased in August as the economy started to recover from the coronavirus driven downturn, data from the People’s Bank of China revealed Friday.

Banks offered CNY 1.28 trillion loans in August. This was bigger than the expected level of CNY 1.22 trillion and CNY 992.7 billion loans provided in July.

Total social financing, a broad measure of credit and liquidity in the economy, surged to CNY 3.58 trillion from CNY 1.69 trillion in July.

The broad money supply M2 climbed 10.4 percent on year, slower than the 10.7 percent growth logged in July.

Iris Pang, an ING economist said the stimulus measures are in progress, which includes traditional infrastructure stimulus and 5G infrastructure. These projects will continue to support GDP growth in the third quarter and the fourth quarter.

The economist said credit growth momentum is set to last into the end of the year, although any cut in interest rates are not expected.

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