ANZ note that "China's M2 money supply........>

CHINA: ANZ note that "China's M2 money supply growth decelerated to 8.2% y/y in

August, likely reflecting an increase in bond issuances by local governments

during the month. The slowdown in M2 money supply growth was mainly caused by a

decline in deposits from non-bank financial institutions (August: -CNY221.1bn vs

July: CNY860.9bn). Since the net supply of new general and project-based local

government bonds has increased recently (CNY569.2bn in August compared with

CNY204.6bn in August 2017) we believe non-bank FIs may have shifted their banks'

deposits to bond purchases. For the first time since May this year, the figure

for total social financing has surpassed new yuan loans, driven by an increase

in corporate bonds, which reached CNY337.6bn in August, compared with CNY223.7bn

in July and CNY141.3bn in June. It seems that the PBoC's actions to stabilise

bond market sentiment have been effective."