Goldman Sachs: China's February Credit Expansion Exceeds Expectations

Goldman Sachs reports that China's February aggregate financing and credit data comprehensively surpassed expectations. New RMB loans reached RMB 900 billion, exceeding both the Bloomberg consensus of RMB 866 billion and Goldman's own forecast of RMB 800 billion. Total social financing (TSF) surged to RMB 2,379 billion, significantly outpacing market expectations of RMB 2,025 billion. While outstanding loan growth edged down slightly to 6.0% year-on-year, corporate loan demand showed signs of improvement, whereas household borrowing remained notably weak.

Seasonally adjusted TSF flows rose from January to February, driven primarily by a sharp expansion in shadow banking credit, which jumped from RMB 8 billion to RMB 161 billion. Government bond net issuance also increased on a seasonally adjusted basis. The outstanding TSF growth rate held steady at 8.2% year-on-year. M1 growth accelerated to 5.9% from 4.9% in January, likely supported by faster fiscal expenditure and a later Lunar New Year timing. M2 growth remained stable at 9.0%.

Goldman Sachs notes that fiscal deposits fell by RMB 350 billion, approximately RMB 160 billion less than a year ago, signaling accelerated government spending. Overall, the credit expansion was robust but structurally divergent, supported by bank lending and shadow credit, though persistent household loan weakness remains a concern.