China’s total social financing (TSF) growth surged to its highest level on record last month, indicating that Beijing’s recent push for more lending to offset a slowdown is taking effect, Caixin reports.
TSF, a gauge of the economy’s credit and liquidity, rose to Rmb 4.64 trillion ($684.93 billion) in January – a big jump from December’s reading of Rmb 1.59 trillion, according to People’s Bank of China data.
In a statement accompanying the figure release, the bank said that the increase doesn’t suggest a looser stance on credit but instead reflects real economic demands, a more efficient monetary transmission mechanism and some seasonal factors.
Policymakers have made higher lending a priority as the economy battles a prolonged and widespread cooling, implementing four reserve cuts last year. Net new loans were up 11.32% from a year before last month at Rmb 3.23 trillion, beating market estimates. Borrowing also became easier for small and micro firms in the private sector, with the average lending rate dropping to 6.16% from 6.37% a year ago.