DeepDive: Data Dump December 2023

China’s macro data continued to underwhelm in November. While corporate loans have remained fairly robust year-to-date, monetary policy transmission appears to have had less of an impact. Household loans continued to point to consumer caution and total retail sales came in weaker than expected. Household deposit balances are still moving away from the pre-pandemic trendline, albeit at a slower pace. Find out more in this month’s Data Dump.

We have been somewhat contrarian in our view that corporate loans have been fairly robust throughout the year. While they were down 7% year-on-year in November, they are still up 7.5% year-to-date, suggesting that growth has not been as depressed as portrayed, considering the high base last year. What is puzzling, however, is that the gap between M1 and M2 remains deeply negative, with corporate demand deposits still contracting and corporate term deposits continuing to grow strongly (also see QuickScan: Taking Stock of Money Supply Developments).