Tighter financial conditions in China may cause policy change: ANZ

HONG KONG - Financial conditions in China remained tight in June, as the growth of both total social financing (TSF) and M2 money supply reached historical lows (9.8% y/y and 8.0% y/y, respectively).

“In contrast with the weak TSF figure, bank loans were solid and registered stable y/y growth (12.7%) suggesting that China’s shadow banking activities have continued to shrink,” ANZ Bank notes in a research brief.

“We think the authorities will attempt to stabilise overall financial conditions with a shift from broad-based deleveraging to “structural deleveraging”.

“The People’s Bank of China (PBoC) may continue to take actions to support financial conditions, following today’s data.” www.live.anz.com (ATI).