MNI BRIEF: China July M1 Hits Record Low On Weak Demand

MNI (BEIJING) - China's M1 money supply contracted for a fourth consecutive month in July, falling by 6.6% y/y to a record low, as company investment and consumer spending continued to weaken amid a property downturn, People's Bank of China data showed on Tuesday.

Growth in the M2 measure quickened to 6.3%, after decelerating for 18 months, rising from June’s 6.2% growth and beating the 6.0% forecast. 

Banks extended CNY260 billion in new loans in July, declining from June’s CNY2.13 trillion. Total social financing rose by CNY770 billion, falling from growth of CNY3.3 trillion in June. Shadow banking transactions decreased by CNY75.7 billion, compared to a CNY130.1 billion contraction the previous month. 

Advisors told MNI Beijing could issue consumer coupons or take other measures in H2 that offer subsidies to lower-income households to ensure the economy meets its “around 5%” growth target. (See MNI EM: Beijing Shifts Focus To Consumption To Boost H2 GDP)