MNI 5 THINGS: China New Loans Fall For 2nd Month In Row In Aug

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

supply and credit growth data, released Wednesday by the People's Bank of China

(PBOC):

     - Chinese banks extended CNY1.28 trillion in new yuan loans in August,

falling short of the MNI median forecast of CNY1.35 trillion, and marking the

second consecutive monthly moderation (following CNY1.45 trillion in July and

CNY1.84 trillion in June). This indicates that despite PBOC efforts to boost

credit supply, including via the provision of window guidance to big lenders,

low risk appetite among banks continues to weigh on credit growth.

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

the economy, rose to CNY1.52 trillion in August (from CNY1.04 trillion in July),

overshooting MNI's survey median of CNY1.23 trillion. Corporate bond financing

drove the strong rise in TSF -- net financing via corporate bonds rose to

CNY337.6 billion, leaving it far above the CNY113.7 billion registered last

August.

     - Shadow bank lending continued to fall in August, but at a softer pace as

regulators relaxed their tight grip. Trust loans, entrusted loans and

undiscounted bankers' acceptances decreased by CNY267.4 billion in total,

following a CNY488.6 billion contraction in July.

     - M2 money supply grew by 8.2% y/y, coming in below the 8.5% MNI survey

median and slowing from 8.5% in July, likely due to lower fiscal deposits in

August.

     - M1 growth also slowed, moderating from 5.1% in July to a

more-than-three-year low of 3.9% in August, indicating that firms are saving

more of their cash as a weaker economic growth outlook weighs on their

willingness to invest.

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

--MNI London Bureau; +44 207-862-7489; email: ukeditorial@marketnews.com

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