Too Much Money?

The supply of renminbi should be determined by the demands of the economy China’s broad money (M2) stood at 99.86 trillion yuan ($16.08 trillion) at the end of February, a year-on-year increase of 15.2 percent. The data released by the People’s Bank of China,     

ECONOMY

正Credit Growth China's credit data in April was weaker than expected,but overall credit growth stayed strong,and the central bank's monetary policy will continue to be prudent M2,a broad measure of money supply that covers cash in circulation and all deposits,rose 12.8 percent year on year to 145 trillion yuan($22.19 trillion)at the end of April,     

China’s Industrial Future

China’s economic statistics released in recent months imply that its economic slowdown may deepen. Three figures in particular are of concern to economists;those showing drops in growth of industrial value-added output, in the money supply,and in power generation. The growth of industrial value-added output is at a three-year low, having increased only 9.3 percent over a year. The narrow measure of money supply’s (M1) 3.1 percent year-on-year growth marks a record low, while the miniscule 0.7 percent growth of total power generation signals a scaling back of the country’s industrial activities.In a meeting at the end of May, Chinese     

Calming Local Debt Fears

<正>Local governments in China, barred from directly selling bonds and taking out bank loans, have set up thousands of financing vehicles to raise money to fund infrastructure projects. A first-ever audit found that these local government financing vehicles have accumulated a record breaking debt of 10.7 trillion yuan ($1.7 trillion).But there’s no need to panic over this debt, said Xu Lin, Director of the Department of Fiscal and Financial Affairs of the National Development and Reform Commission (NDRC), in a question-andanswer statement posted on the NDRC’s website on August 29.Edited excerpts follow:     

MARKET WATCH

OPINION Government Investment Spurs Excessive Money Supply In late March,China’s broad money(M2) hit 103.61 trillion yuan($16.76 trillion),posing a severe challenge to financial security and the independence of the central bank.With the eruption of the global financial crisis,it seems that the role of central banks around the world has been shifting to stimulating economic growth rather than maintaining the stability of a currency’s value.     

Special Measures

The approval of 1.55 trillion yuan in China’sspecial bonds will help restructure financialmarket and monetary policy On June 29,after having beenapproved by the Standing Committee of the National People’s Congress (NPC), the Chinese Ministry of Finance announced that it would issue 1.55 trillion yuan in special bonds in order to buy$200 billion in foreign currency to fund China’s new overseas investment company.The interest rate of the book-entry treasurybonds is to be decided by the market.     

A Pivot in Recovery

According to statistics from Chinese Customs,China’s total imports and exports surpassed$6 trillion in 2021,up 30 percent year on year.With a global economy dragged down by the COVID-19 pandemic,China is making its due contributions to stabilizing the world’s commercial development.Without the significant records of China’s foreign trade,the global economic picture would surely have taken a turn for the gloomier.Some might argue that the world’s top economic power,the U.S.,marks the backstop for the global economy,but reality holds it has failed to play the part.Instead,by taking advantage of the dollar as an international currency,it is recklessly printing money to create a bogus boom and transferring its internal crises onto external parties.In the past six months alone,it has printed$3 trillion worth of greenbacks,resulting in soaring domestic inflation,national debts,fiscal deficits and an expanding risk exposure at home,all the while undermining economic stability abroad.     

Understanding China's Forex Reserves

正Statistics issued by China’s central bank in early February revealed that China’s foreign exchange(forex)reserves stood at$2.9982 trillion at the end of January,a drop of$12.3 billion compared to the previous month.Upon receiving the data,some analysts expressed concern,claiming that China’s forex reserves had breached the psychological threshold of$3 trillion.     

Credit Expansion Buoyed by Real Economy

<正>Chinese banks extended a forecast-beating amount of new loans in September,while growth of broad money supply(M2)also accelerated,buoyed by credit demand from the real economy.New yuan-denominated lending in September hit 1.27 trillion yuan($192.8 billion),up from 1.09 trillion yuan($165.77billion)in August,well above market expectations,according to data released by the     

Avoiding the Trap

In late February, the National Bureau of Statistics (NBS) published its annual statisti- cal bulletin, showing that China’s gross domestic product (GDP) registered an increase of 7.8 percent in 2012, reaching 51.93 trillion yuan ($8.33 trillion). With the Chinese population expanding to 1.3 billion, NBS figures show that the country’s per-capita GDP reached $6,100 last year, leaving