Overall monetary growth reached 8.1% in December, slightly up from the 8% growth in November, based on official data. Total social financing outstanding in December saw a 9.8% YoY growth, down from 9.9% in November, setting another all-time low for credit growth.
Total outstanding renminbi loans lent to the real economy reached Rmb134.7tr ($19.9tr) in 2018, a 13.2% increase. Those in foreign currencies came to Rmb2.2tr, a 10.7% decrease.
Bank loan growth accelerated to 13.5% YoY in December, up from 13.1% YoY in November and reaching the highest level since December 2016, according to data from the People’s Bank of China on Tuesday.
On the bond side, outstanding corporate bonds reached Rmb20.1tr, a 9.2% increase. Outstanding local government special purpose bonds reached Rmb7.23tr, a 32.6% increase.
“Total social financing data disappointed the market significantly in October,” Yu Song, China economist at Beijing Gao Hua Securities, wrote in a January 16 note. “But since November, effective window guidance and lower market rates ensured the amount of RMB loan supply was reasonably large given the continued weakness in shadow banking activities and the relatively small amount of government bond issuance.”
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SGX’s USDCNH futures trading volumes finished strong in 2018 with a monthly record high of $65.4bn in December, according to a Monday report by the exchange. Total USDCNH futures in the year reached $530bn, a 181% growth from 2017.
While USDCNH futures volume in the first half of 2018 climbed to more than $193bn, it saw an even bigger jump in the second half, jumping to close to $340bn, thanks to the volatile renminbi and the escalating trade tensions between the US and China.
Average daily volume of USDCNH futures on SGX in 2018 reached $2.17bn. The trading volume of USDCNH futures crossed $1bn on 238 days, compared with 54 such days since the launch of the contract in 2014.
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FTSE Russell has launched a new index series tracking Chinese green bonds, the FTSE Chinese Green Bond Index Series, on Thursday. The new index will benchmark securities whose proceeds are specifically used to finance climate or environmental projects in China.
There are 126 bonds already included in the main index in the new series, covering approximately 75% of all onshore bonds labelled green issued by the Chinese government.
China is now second-largest green bond market in the world with $37bn worth of green bonds issued in 2017.
In other news, the inclusion of A-shares into FTSE Russell global indices is expected to bring a total of $10bn of passive foreign investment into China’s capital market in 2019, China Securities Journal, a state-owned national securities newspaper, reported. An additional $50bn additional investments are expected to flow into the Chinese market in the next three to four years.
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In December, the number of new foreign-invested enterprises reached 5,830, a 20.5% increase YoY, according to datafrom the Ministry of Commerce (MoC). Foreign investment reached Rmb92.3bn, a 24.9% YoY increase.
Over the course of 2018, 60,533 new foreign-invested enterprises were set up, a 69.8% increase from last year, with a deployment of foreign capital equal to Rmb885.6bn, a 0.9% increase from the previous year.
Notably, in 2018, foreign investment in the manufacturing industry took up 30.6% of the total, up by a fifth from the year before. Within the manufacturing industry, the high tech sector saw the fastest growth pace in the amount of foreign capital used.
The amount of foreign capital used in central and west regions of China increased by 15.4%. Foreign-invested large projects, with contract value higher than $50m, reached 1,700, a 23.3% increase from the year before.
In 2018, foreign investment from the UK and Germany saw the highest growth of 150.1% and 79.3%, respectively. Investment from the US saw the lowest growth of 7.7%.
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Outbound direct investments from China to the rest of the world reached $129.8bn in 2018, a 4.2% increase from 2017, according to data provided by MoC.
Among these, financial investment totalled $9.3bn, a 105.1% jump, while non-financial investment saw only a 0.3% increase to $120.5bn.
In 2018, Chinese corporations made a total of $15.6bn non-financial direct investment to 56 BRI countries, an 8.9% increase from 2017.
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Fosun International and Standard Chartered signed a strategic cooperation agreement on January 16. Through this collaboration, Fosun hopes to tap Standard Chartered’s network and resources in the BRI countries.
“The signing of this global strategic cooperation will help both Fosun and Standard Chartered seize the opportunity to make greater contributions to the development of BRI-related economies,” Simon Cooper, chief executive officer of corporate, commercial and institutional banking at Standard Chartered, said in the press release.