China's new yuan loans rise in 2021

BEIJING - China's new yuan-denominated loans totaled 19.95 trillion yuan ($3.13 trillion) in 2021, up 315 billion yuan year-on-year, central bank data showed Wednesday.

In December alone, new yuan loans stood at 1.13 trillion yuan, down 123.4 billion yuan year-on-year, according to the People's Bank of China (PBOC).

The outstanding M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 9 percent year-on-year to 238.29 trillion yuan at the end of 2021.

The M2 growth was 0.5 percentage points higher than that at the end of November, but was 1.1 percentage points lower than the same period the year before.

The narrow measure of the money supply (M1), which covers cash in circulation plus demand deposits, had risen 3.5 percent year-on-year to 64.74 trillion yuan by the end of December.

The M1 growth was 0.5 percentage points higher than that at the end of November, but 5.1 percentage points lower than the same period the previous year.

The outstanding M0, the amount of cash in circulation, had risen 7.7 percent year-on-year to 9.08 trillion yuan by the end of last month.

The central bank injected net cash of 651 billion yuan into the market in 2021, PBOC data shows.

Newly added social financing, a measure of funds that individuals and non-financial firms receive from the financial system, came in at 2.37 trillion yuan in December. That was up 720.6 billion yuan and 166.9 billion yuan from the same period a year ago and in 2019, respectively.

Total new social financing reached 31.35 trillion yuan last year, a reduction of 3.44 trillion yuan from the 2020 level and an increase of 5.68 trillion yuan from the 2019 level.

Total outstanding social financing had risen 10.3 percent year-on-year to 314.13 trillion yuan by the end of 2021. Of the total, outstanding RMB loans to the real economy were at 191.54 trillion yuan, up 11.6 percent year-on-year.

Judging from that structure, the real economy has received the lion's share of loans. Outstanding yuan loans to the real economy accounted for 61 percent of outstanding social financing by the end of last year.

Wednesday's data also showed that China's new yuan deposits in 2021 totaled 19.68 trillion yuan. By the end of December, total outstanding yuan deposits stood at 232.25 trillion yuan, an increase of 9.3 percent year-on-year.

For the whole of 2021, RMB settlements for cross-border trade amounted to 7.94 trillion yuan and RMB settlements for direct investment reached 5.8 trillion yuan.

Economic work in 2022 should prioritize stability while pursuing progress. Prudent monetary policies should be flexible and appropriate, and liquidity should be maintained at a reasonable and ample level, according to the tone-setting Central Economic Work Conference that took place in December 2021.

PBOC governor Yi Gang said in an interview last month that monetary policies will be more forward-looking, effective and targeted, and the financial sector will offer greater support for the real economy.

Credit growth will be stable, he said, noting that money supply and social financing expansion will basically match the nominal economic growth rate.