China’s new bank loans hit a record $ 3.13 trillion in 2021

New bank loans in China fell more than expected in December from the previous month, but lending in 2021 hit a record, as the central bank slowly strengthens its monetary support to cushion the slowdown in the economy.

Chinese banks provided 1.13 trillion yuan ($ 177.56 billion) in new yuan loans in December, down from 1.27 trillion yuan in November and below analysts’ expectations, according to data released by the Bank on Wednesday. People of China (PBOC).

Analysts polled by Reuters had forecast that new yuan loans would drop to 1.25 trillion yuan in December. The amount was also lower than the 1.27 trillion yuan in the same month of the previous year.

But new bank loans reached a record 19.95 trillion yuan (US $ 3.13 trillion) for the year, 1.6% more than the 19.63 trillion yuan in 2020, the previous record, and equivalent to more than the Gross Domestic Product. (PBI) of the United Kingdom.

“Credit data for December was slightly weaker than expected, but financing for the real economy has improved,” said Luo Yunfeng, an analyst at Merchants Securities.

China’s economy got off to a good start in 2021 as activity continued to rebound from a pandemic-induced slump in 2020, but has lost steam in recent months due to the housing market recession, pollution restrictions industry and the strict measures of COVID that have affected consumer confidence and spending.

To prop up growth, the central bank lowered the reserve requirement ratio (RRR) for banks on December 15, its second such move in 2021, freeing up 1.2 trillion yuan in long-term liquidity to boost business activity.

The broad M2 money supply grew 9% from a year earlier, according to central bank data, a nine-month high and above the 8.7% estimates forecast in the Reuters poll.

Loans outstanding in yuan grew 11.6% in December from a year earlier, the slowest expansion since May 2002, compared to 11.7% growth in November. Analysts expected an advance of 11.7%.