China's new yuan loans rise in January

BEIJING, Feb. 14 (Xinhua) -- Chinese banks extended 2 trillion yuan (about 295 billion U.S. dollars) of new yuan loans in January, up from 1 trillion yuan a month ago, central bank data showed Tuesday.

The increase was 475 billion yuan less than that of the same period last year, according to a People's Bank of China (PBOC) online statement.

China's banks always start the new year with a bang, maxing out loans to their highest quality corporate borrowers, according to Bloomberg economist Tom Orlik.

M2, a broad measure of the money supply that covers cash in circulation and all deposits, grew 11.3 percent from a year earlier to about 158 trillion yuan.

M1, a narrow measure of the money supply which covers cash in circulation plus demand deposits, rose 14.5 percent year on year to 47trillion yuan.

M0, the amount of cash in circulation, stood at 8.7 trillion yuan, a year-on-year increase of 19.4 percent. January also saw a net money injection of 1.8 trillion yuan, the central bank said.

Both M2 and M1 registered new recent lows partly due to weak home sales, said Deng Haiqing, chief economist with JZ Securities.

PBOC data also showed new private investment increased by 262 billion yuan from the same period a year ago to 3.7 trillion yuan. The figure was 1.6 trillion yuan in December 2016.

In January, yuan-denominated deposits rose 1.48 trillion yuan, a drop of 564 billion yuan from a year earlier.

At the end of January, total outstanding yuan-denominated loans stood at 109 trillion yuan, up 12.6 percent from the previous year.

Outstanding deposits in both yuan and non-yuan currencies rose 10.6 percent year on year to 157.05 trillion yuan.

Last month, yuan-denominated cross-border trade settlement reached 322 billion yuan. Direct investment settled in yuan stood at 66.7 billion yuan, the central bank said.

Although China's economy continues to leverage up, it is now doing so at a slower and slightly more sustainable pace, Orlik said, forecasting a continuation of cautious, incremental tightening.

Economic data released Tuesday, including a five-year high producer price index, indicates that China's economic growth is firming up.

Citing a credit surge in the first quarter of 2016 which heralded a warming of the economy, Deng predicted the trend would continue in the first quarter of this year.