Growth in China’s total social financing (TSF), a figure that reflects an economy’s credit levels including off-balance-sheet financing or “shadow banking”, fell short of market expectations in June, according to central bank data on Friday, despite a marked uptick from the previous month.
TSF rose by Rmb 1.18 trillion ($176.4 billion) last month, compared with Rmb 760.8 billion in May. This brings TSF for the first 6 months of the year to Rmb 9.1 trillion, or Rmb 2.03 trillion less than the same time in 2017.
New yuan-denominated loans grew by Rmb 690 billion from May, totalling Rmb 1.84 trillion. This was faster than some analysts expected, but the rise was offset by slowdowns in other credit channels.
“A further slowdown in lending adds downside risks to growth and is likely to trigger a policy response,” said Julian Evans- Pritchard of Capital Economics. “We [Capital Economics] think the People’s Bank will soon decide to act more aggressively… in order to prevent the economy slowing too rapidly.”