China Injects Record Amount Of Loans In January

February 9, 2021

On one hand China is desperate to tell the world that this time it is taking deleveraging of the world's largest and most indebted financial system seriously. On the other hand, it is doing this:

The chart shows that in January, China created a staggering, record 3.58 trillion in new yuan loans, a number which easily surpassed the previous record of 3.340 trillion set last January just as the Chinese economy shut down as a result of covid, when only gargantuan credit injections prevented a total economic collapse in the world's 2nd largest economy. It's almost as if only ever greater credit injections are keeping China alive.

Because it wasn't just new loans: the broadest Chinese credit aggregate, Total Social Financing which includes new loans as well as shadow debt creation and bond issuance, also exploded to a monstrous 5.170 trillion yuan, which at today's exchange rate is roughly $800 billion.

That's right: in one month China injected roughly 6 months of QE into the economy. And to think of all the praise Stanley Druckenmiller heaped just a few days ago on China for its "fiscal sanity".

https://www.zerohedge.com/markets/china-injects-record-amount-loans-january