{"id":305860,"date":"2010-02-11T00:05:00","date_gmt":"2010-02-11T05:05:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/what-tightening-chinese-january-loan-growth-explodes-and-property-prices-accelerate-higher-2010-2"},"modified":"2010-02-11T00:05:00","modified_gmt":"2010-02-11T05:05:00","slug":"what-tightening-chinese-property-accelerates-higher-as-money-supply-explodes","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/305860","title":{"rendered":"What Tightening? Chinese Property Accelerates Higher As Money Supply Explodes"},"content":{"rendered":"

\"China<\/p>\n

We’re still waiting to see substantive effects of Chinese efforts asset markets.<\/p>\n

China’s January loan growth has come in at 1.39 trillion yuan, which while down 14% year over year, accounted for more loan growth than the preceding three months combined. (Note though that Chinese banks tend to front-load their lending into the beginning of the year)<\/p>\n

January loan growth is already nearly 20% of the governments 7.5 trillion yuan loan growth target for the full year. In one month.<\/p>\n

Property prices are rising faster than during any month in nearly two years. The funny thing is that China’s reported CPI (consumer price index, inflation) remained tame at just 1.5%, slowing from 1.9% and missing expectations of 2.1%. Meanwhile, the stock market remains below its 2009 peak.<\/p>\n

Perhaps property is capturing a larger share of liquidity these days:<\/p>\n

Bloomberg:<\/a> Property prices in 70 cities rose 9.5 percent in January from a year earlier, the National Development and Reform Commission said today. Producer prices climbed 4.3 percent, the most since October 2008, the statistics bureau said.<\/p>\n

…<\/p>\n

M2, the broad measure of money supply, rose 26 percent from a year earlier. Inflation weakened as food prices rose at a slower pace. Last month’s economic data was distorted by a Chinese lunar new year holiday that fell in January in 2009 and in February this year.<\/p>\n

Some believe that February loan growth could fall below 1 trillion yua<\/a>n, partly due to fewer working days from the Chinese Lunary New Year. Still, even if February loan growth comes in at just 1 trillion, this would still make January and February loan growth already one-third of the government’s full year target. The problem with Chinese tightening efforts could be that expectations<\/em> of government tightening has made lending efforts throughout the economy even more frantic:<\/p>\n

Reuters:<\/a> “However, expectations of gradual monetary policy tightening this year will push banks to continue rushing into lending as early as possible in the year.”<\/p>\n

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