At the beginning of 2022, the financial data performed well.
On February 10, the central bank released its financial statistics report for January 2022. According to the data, RMB loans increased by 3.98 trillion yuan in January, a record high of single-month increment, an increase of 394.4 billion yuan year-on-year; the increase in the scale of social financing rebounded significantly, to 6.17 trillion yuan, 984.2 billion yuan more than the same period last year.
In the view of analysts, the sharp increase in credit benefited from the loose operation of monetary policy such as the RRR cut at the end of 2021 and the large seasonal financing demand at the beginning of the year, new credit and social financing exceeded market expectations, and in the next stage, stable growth should continue to expand domestic demand and stabilize external demand.
Credit increments hit record highs
In 2022, credit ushered in a "good start". Financial statistics show that RMB loans increased by 3.98 trillion yuan in January, the highest point of single-month statistics, an increase of 394.4 billion yuan year-on-year. Compared with December 2021, RMB loans increased by 2.85 trillion yuan in January.
By sector, household loans increased by 843 billion yuan, of which short-term loans increased by 100.6 billion yuan, medium- and long-term loans increased by 742.4 billion yuan; enterprise (business) unit loans increased by 3.36 trillion yuan, of which short-term loans increased by 1.01 trillion yuan, medium- and long-term loans increased by 2.1 trillion yuan, bill financing increased by 178.8 billion yuan; non-banking financial institutions loans decreased by 141.7 billion yuan.
From the perspective of credit structure, part of the increase in credit in January was mainly due to new loans in the corporate sector, accounting for 84.4% of the total new loans, a new high since February 2021. The new loans in the residential sector increased by 427 billion yuan less than in January 2021, of which short-term loans to residents and medium- and long-term loans increased by 227.2 billion yuan and 202.4 billion yuan respectively year-on-year.
The reporter noted that since the end of 2021, the central bank has actively expressed its position and used a number of policy tools to support credit delivery, before the release of this financial data, affected by many factors such as the active support and guidance of policies, the actual demand of the market and the Spring Festival, the market has a large divergence in credit expectations for January. However, from the actual performance, the credit increase as a whole exceeded market expectations.
In the view of Lian Ping, chief economist of Zhixin Investment and president of the Research Institute, the sharp increase in credit benefited from the loose operation of monetary policy such as the RRR cut at the end of 2021 and the large seasonal financing demand at the beginning of the year, which was implemented in January credit data, the financing situation of enterprises was improved, medium- and long-term infrastructure construction projects began to exert strength, and the investment of financial funds after the issuance of local government special bonds reflected the significant strengthening of credit support for the real economy.
"But structural problems cannot be ignored. Affected by the downturn in the real estate market before the Spring Festival and the restrictions on mortgage loan delivery, the credit of the residential sector increased less year-on-year, while the recovery of medium- and long-term financing demand in various departments still needs time. Lian Ping added. Overall, affected by policy promotion and the peak of seasonal credit delivery, the monetary policy effect of wide money and credit increase in January was remarkable, and the fiscal policy was obviously ahead of schedule. However, the fact that medium- and long-term credit growth has slowed down cannot be ignored, and the goal of stabilizing growth is still difficult.
In response to the trend of loans in the residential sector, Yan Yuejin, research director of the Think Tank Center of E-House Research Institute, said that compared with the same period in 2021, the loan data of the household sector is actually not strong, and the same is true for the medium- and long-term loans of the household sector that represent the residents' housing loans. This has something to do with the poor performance of the market in January. However, from the perspective of the general environment, credit in January is obviously forced, and with the adjustment of real estate expectations, the logic of credit support for housing transactions will be reflected, and the relevant household loan data will also improve, and it will also further drive the activity in the field of housing consumption.
M2 growth accelerated
Credit grew faster than expected in January, and broad money (M2) also continued its sharp recovery. According to the data disclosed by the central bank, at the end of January, the balance of M2 was 243.1 trillion yuan, an increase of 9.8% year-on-year, and the growth rate was 0.8 and 0.4 percentage points higher than that of the end of the previous month and the same period of the previous year, respectively. The balance of narrow money (M1) was 61.39 trillion yuan, down 1.9% year-on-year, excluding the impact of the Spring Festival timing factor, M1 increased by about 2% year-on-year. The balance of currency (M0) in circulation was 10.62 trillion yuan, an increase of 18.5% year-on-year. Net cash injection for the month was 1.54 trillion yuan.
In the report, the central bank explained that due to the centralized payment of salaries and benefits by enterprises before the Spring Festival, unit demand deposits will be transferred to personal deposits, resulting in a reduction in M1. The last working day before the Spring Festival in 2022 is January 30, while February 10, 2021.
For the sharp rise in the growth rate of M2, Lian Ping said that on the one hand, a large amount of credit has pushed up unit deposits, due to the reduction of business activities before the Spring Festival and the limited pace of construction under the influence of the epidemic, more demand deposits of enterprises have shifted to time deposits; on the other hand, the issuance of employee wages, bonuses, etc. has pushed up the savings deposits of urban and rural residents. In addition, from the data performance of "RMB deposits increased by 3.83 trillion yuan, an increase of 260 billion yuan year-on-year", it can also be seen that the business activities of enterprises were greatly affected by the Spring Festival.
Since the end of 2021, monetary and financial policies have begun to support stable growth, and the central bank has released long-term funds through RRR cuts and interest rate cuts, maintaining reasonable liquidity and increasing the monetary multiplier. Wen Bin, chief researcher of China Minsheng Bank, also further analyzed that the banking industry has increased its credit delivery and enhanced its ability to derive credit. Along with the fiscal policy to support stable growth, it has also played a role in increasing monetary investment.
The bond market is gradually returning to its normal rhythm
In terms of social financing data, the increase in social financing has also rebounded significantly. According to preliminary statistics, the increase in the scale of social financing in January was 6.17 trillion yuan, 984.2 billion yuan more than the same period last year. Compared with December 2021, the increase in the scale of social financing increased by 3.8 trillion yuan.
Among them, the RMB loans issued by the social financing increment to the real economy increased by 4.2 trillion yuan in January, which is the highest point of single-month statistics, an increase of 380.6 billion yuan year-on-year. Government bonds increased by 602.6 billion yuan, a significant increase of 358.9 billion yuan year-on-year, and also continued the supporting role of government bonds on social financing growth since October 2021.
Lian Ping told reporters that the off-balance sheet financing business increased by 447.9 billion yuan in January, an increase of 32.8 billion yuan year-on-year, but compared with historical data, January is the peak period of delivery, with strong seasonal factors, and it cannot be considered to have recovery growth. Maintaining the stable development of the real estate market requires the resumption of off-balance sheet business in a timely manner to meet the reasonable financing needs of high-quality housing enterprises. In addition, corporate bonds increased by 579.9 billion yuan, the highest monthly increment since May 2020, which also shows that after more than two years of negative impact of default events, bond issuance has gradually returned to normal rhythm, and the market recovery trend is obvious.
Lian Ping believes that after the RRR cut at the end of 2021, the capital situation of the banking system has not yet improved significantly, and monetary policy will still maintain a loose operation, and the possibility of another slight RRR cut in the first quarter is not ruled out. It is expected that there will be a seasonal decline in credit increments in February, and the balance growth rate may stabilize and rebound to about 11.6%, and the acceleration of government bond issuance is expected to further push the growth rate of social financing to about 10.7%.
Wen Bin stressed that in the next stage, steady growth should continue to expand domestic demand and stabilize external demand. At present, the Fed's monetary policy tightening path is gradually clear, and it is expected to start raising interest rates after the end of bond purchases in March, and will start to reduce the balance sheet in due course. Mainland macro policy should make good use of the window before the substantive contraction of the Fed's policy, make good use of the aggregate and structural policies in view of the problem of insufficient aggregate demand, strengthen the coordination and cooperation between fiscal policy and monetary policy, reverse market expectations as soon as possible, boost confidence, and ensure that the economy operates within a reasonable range.
(Yue Pinyu, Liao Meng)