Aggregate financing, the broadest measure of credit, was 2.58 trillion yuan($425 billion), the People’s Bank of China said in a statement yesterday. New local-currency lending was 1.32 trillion yuan, the highest level since 2010. Trust loans, under scrutiny because of default risks, were about half the level of a year earlier.
The data add to better-than-forecast trade numbers in suggesting that China can limit the scale of any slowdown from last year’s 7.7 percent expansion in gross domestic product. At the same time, the figures contrast with a central bank call in mid-January for lenders to control surging loans and highlight diminishing economic returns from credit growth.
The question now one could ask is whether it will go sour later and come back to bite the Chinese government at a later by insisting growth is the key or solution to all issues.