2012-02-16

China aims for 14% M2 growth; M2 growth hit 17% in December

China's M2 to grow 14 pct in 2012
The targeted growth rate was slightly higher than that of last year, PBOC data showed.

The country's M2 rose 13.6 percent year-on-year to 85.16 trillion yuan in 2011, down 6.1 percentage points from the previous year.

By the end of January, the M2 increased by 12.4 percent year-on-year to 85.58 trillion yuan, according to the PBOC.
As I've covered in other posts on Chinese money supply, I don't know where they get their numbers. I pull them off the PBOC website and compare December 2010 with December 2011 and come up with 17% growth in money supply. By my count, January 2012's year-on-year growth exceeds 16%. Thus the 14% target is below the rate for most of 2011, when there were only two months with less than 14% year-on-year growth: August and September.

Below is a comparison of M2 money supply and the Shanghai Composite. Money supply ticked up in December and the market followed in January. Regardless of how they calculate growth in money supply, it has been falling for three years. Whether this latest uptick and forecast ends the three-year slowdown in money supply growth remains to be seen.


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