Chinese banks burst out of the 2014 starting blocks with a four-year high in monthly new lending that appeared to fly in the face of government efforts to rein in credit growth.
It is customary for banks in China to lend most heavily at the start of the year, but the numbers this January were unusually strong even accounting for seasonal patterns.
New local-currency loans reached Rmb1.32tn ($218bn) last month – nearly triple December’s total, Rmb200bn more than market expectations and the highest monthly total since January 2010.
China’s broadest measure of new credit issuance, which includes lending by non-bank financial institutions, also referred to as “shadow banking”, also surged. This measure, known as total social financing, hit Rmb2.58tn, about 25 per cent higher than forecast.
The boom in lending augurs well for the Chinese economy in the coming months, allaying fears that higher market interest rates will starve companies of financing and weigh on growth.