MNI 5 THINGS: China M2 Expansion Slows to 8% as Economy Cools

     BEIJING (MNI) - The following are the key points from China's October money

supply and credit growth data released by the People's Bank of China (PBOC) on

Tuesday:

     - M2 in October grew by 8% y/y, a level some economists considered a red

flag of the country's growth, missing the MNI survey median of 8.3% and down

from 8.3% in September. The only other time the measure fell to 8% this year was

in June. M1 growth also slowed to 2.7% y/y in October from 4.0% in September.

     - Total social financing (TSF), a broad measure of credit and liquidity,

slumped to CNY728.8 billion, much lower than the MNI median projection of

CNY1.16 trillion and down from CNY2.21 trillion in September. It was the lowest

level since July 2016's CNY490.0 billion. This indicated that the massive

liquidity injected by the central bank had not worked into the real economy.

     - New loans increased by CNY697 billion, below the MNI survey projection of

CNY800 billion, and only about half of September's CNY1.38 trillion. This

confirmed reports that banks have a low appetite for risks and are discouraged

by the low lending rates.

     - Corporate bonds issued were CNY138.1 billion, rebounding from the low

point of CNY8.7 billion in September. This was likely due to the government's

effort to encourage businesses to issue bonds for financing. 

     - Shadow banking finance continued to contract at a fast pace, as

regulators kept a tight grip. Trust loans, entrusted loans and undiscounted

bankers' acceptances together decreased by CNY267.5 billion, following a decline

of CNY289.0 billion in September. 

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com

[TOPICS: MAQDS$,M$A$$$,M$Q$$$,MT$$$$]