Aggregate financing in China drops 11.4%

One measure of aggregate financing in China fell 11.4% to RMB9.8 trillion (US$1.53 trillion) in the first nine months of 2011 compared with last year, Bloomberg reported. Aggregate financing includes bank lending, off-balance sheet loans and bond and stock sales. Approximately 58% of the lending was denominated in renminbi, up 1% from last year. The People’s Bank of China (PBoC) has introduced the new gauge this year in an effort to get a clearer picture of credit creation. It is also working on a new measure of money supply, called M2+, which would capture growth in lending not calculated in the traditional M2 statistics, correcting for an underestimation of growth. M2+ will include data from the PBoC, the National Development and Reform Commission (NDRC), and the China Securities Regulatory Commission (CSRC). The central bank has not yet decided if the measure can be used as a monetary policy target.