Chinese money supply rising at slowest pace for over a decade

THE MONEY supply in China is growing at the weakest pace since 2001, according to official figures released yesterday, as analysts prepare for an announcement of more modest GDP growth today.

M2, a measure of the amount of money in the economy, grew by only 12.1 per cent during the year to March. Last year, growth over 14 or 15 per cent was the norm.

Government statistics also showed that Chinese banks lent out 1.05 trillion yuan (£96.03bn) during March, a significant increase on February’s figures.

However, Qinwei Wang at Capital Economics said that “this only reflected a usual seasonal pattern and did not mark a shift in policy stance. In fact, credit slowdown is still on track, with growth in both outstanding loans and overall credit falling further.”

Consensus estimates suggest that Chinese GDP growth will have slowed to around 7.3 per cent in the first quarter.