Event: China's new social financing scale in March was 4.65 trillion yuan, compared with the previous value of 1.19 trillion yuan. In March, RMB loans increased by 3.13 trillion yuan, which is expected to be 2.80 trillion yuan, compared with the previous value of 1.23 trillion yuan. M2 increased by 9.7% year-on-year, expected to be 9.4%, and the previous value was 9.2%.
The stock of social finance was significantly higher than expected, and government bonds and non-standard financing were the main drivers. In March, the new social finance was 4.65 trillion yuan, an increase of 1273.8 billion yuan year-on-year. Driven by the higher increment of social finance, the year-on-year growth rate of social finance stock increased by 0.4 percentage points to 10.6% compared with the previous month. With the advance of Finance and the acceleration of infrastructure projects, government bond financing increased by 392.1 billion yuan year-on-year and 433 billion yuan month on month in March, supporting social finance. Under the influence of factors such as the low base effect, the large impulse of bills and the slowdown of the pressure drop rate of trust loans, non-standard financing increased by 426.2 billion yuan year-on-year in March, supporting the rise of social finance.
New RMB loans are stronger than expected, and the credit structure needs to be optimized. New RMB loans in March were 3.13 trillion yuan, stronger than expected, an increase of 400 billion yuan year-on-year. In terms of structure, on the enterprise side, the value of medium and long-term loans changed from negative to positive in the current month, and the extension of short-term loans increased. In March, the policy increased to bail out small and medium-sized enterprises. Enterprises have a large demand for short-term liquidity funds, and the demand for bank offset loans at the end of the quarter is strong. The short-term loans of enterprises increased by 434.1 billion yuan year-on-year. Meanwhile, medium and long-term loans increased slightly by 14.8 billion yuan year-on-year, weaker than the same period in previous years, and the actual financing demand of enterprises was weak. On the residential side, despite the frequent policies of stabilizing the property market, the economy is facing downward pressure, the real estate boom has not improved, and the residents' willingness to buy houses is still weak. At the same time, the recent epidemic in China has replicated about offline consumption. Residents' short-term loans and medium and long-term loans also recorded a small increase, with a year-on-year decrease of 139.4 billion yuan and 250.4 billion yuan respectively.
The year-on-year growth of M2 exceeded expectations, and the year-on-year growth of M1 was flat. M1 increased by 4.7% year-on-year, the growth rate was the same as that at the end of last month, 2.4 percentage points lower than that in the same period of last year, or pointed to the downturn of real estate, weak consumer consumption and low business activity, resulting in low monetary activity. In March, M2 increased by 9.7% year-on-year, 0.5 and 0.3 percentage points higher than that at the end of last month and the same period of last year respectively, or the residents' willingness to save increased due to the repeated epidemic. Enterprises are more cautious about future operation and regularize enterprise deposits.
The overall performance of credit data in March exceeded expectations, but the overall structure still needs to be optimized. In March, the bright data of government bonds and non-standard financing pushed up the reading of social finance. However, the credit structure needs to be optimized urgently, the sluggish consumption superimposed on the downturn of the real estate industry, and the short-term, medium and long-term loans of residents increased less year-on-year. The prosperity of enterprises is still weak, and the epidemic continues to impact the short-term capital liquidity of enterprises repeatedly. China's steady growth still needs to be strengthened. The minutes of the Federal Reserve meeting in March made it more clear that the Federal Reserve would accelerate the tightening of monetary policy, and the interest rate spread between China and the United States was upside down, which restricted the operation space of China's monetary policy to a certain extent. However, China's currency still maintained a "me dominated" attitude. The importance of steady growth has been repeatedly emphasized at the national standing committee meeting and entrepreneurs' Symposium. It is expected that relevant policies will continue to be strengthened in time to avoid credit collapse. Compared with the current low core inflation level, there is still room for the MLF interest rate to be lowered. There is still room for China to cut interest rates. The second quarter will enter the observation period of reducing reserve requirements and interest rates.
Risk warning: repeated overseas epidemics and less than expected policy implementation.
