A 15.8% rise in the M2 money supply in May and aggregate financing of over 1T yuan shows there...

A 15.8% rise in the M2 money supply in May and aggregate financing of over 1T yuan shows there is plenty of liquidity in China, state-controlled Xinhua news agency says in a commentary piece. Last week's credit crunch in the banking sector was therefore due to widespread speculative trading and shadow financing. The article confirms suspicions that the central bank, which let short-term lending rates hit record highs before intervening to ease the problem, wanted to send a warning as it looks to slow down the credit boom.

Comments (8)
  • bbro
    , contributor
    Comments (11240) | Send Message
    Foreign Exchange Reserves...


    1 People's Republic of China 3,312,000 Dec 2012[1]
    2 Japan 1,250,243 May 2013[2]
    Eurozone 880,824 Mar 2013[2]
    3 Saudi Arabia 626,800 Dec 2012[1]
    4 Russia 533,218 Apr 2013[2]


    Thats 3.3 trillion dollars or 20 trillion yuan
    23 Jun 2013, 07:19 AM Reply Like
  • june1234
    , contributor
    Comments (4504) | Send Message
    Over last month China has begun officially adjusting numbers across the board which show albeit still growing world 2nd largest economy is doing so at probably 1/2 the previously reported rate . Markets adjusted( FXI, EEM) ; short term lending rates shot through roof in their highly leveraged finacial sytstem just like what happened here in 08. China does have huge cash reserves they can release at any time
    23 Jun 2013, 08:59 AM Reply Like
  • bjamesh
    , contributor
    Comments (281) | Send Message
    To me all stats emanating from the PRC are now, and have been for some time, suspect. Some of their trade figures have been a sham as companies "exported" to Hong Kong to navigate around capital controls.


    If you invest there, you are truly a risk taker. Odd for me to say that as I was a firm believer in the China story 2003-2007. I exited my positions there in January 2008. Haven't been back since and don't plan to until accounting standards aren't of the existential variety. We have enough of that in the West.
    23 Jun 2013, 03:23 PM Reply Like
  • Dragon Master
    , contributor
    Comments (48) | Send Message
    Everything from China has been questioned and suspected for last10-30 years, let alone any investments encouraged. Why all the sudden people talk about bad investments in China if ones never believed and invested before. China was and is doing better every year last 30 years on its own and will do better next 20 years.
    23 Jun 2013, 03:36 PM Reply Like
  • Herr Hansa
    , contributor
    Comments (3134) | Send Message
    Yes, we should believe a "state run" news organization. Somehow I think this tug-of-war between banks in China and the central government will still result in the central government winning, but at the cost of damaging some smaller banks. Near term I think we will see more volatility, though in the longer term the desire to move 250 million people into cities will drive the Chinese economy.
    23 Jun 2013, 07:01 PM Reply Like
  • cn_habs
    , contributor
    Comments (591) | Send Message
    Yeah the same speculators that have been calling for a hard landing is back at it again and misleading the "fouls".
    23 Jun 2013, 08:46 PM Reply Like
  • ptmmac
    , contributor
    Comments (161) | Send Message
    The real risk in China is social. China is not a democratic open society. It is a medieval society with a gloss of globalization thrown over the top. There are literally hundreds of "secret" prisons where local government officials hide the most unhappy of their citizens to keep them from being able to complain to some higher authority about how the local rulers have stolen from them. Graft is not a problem it literally is the economy that supplies the middle class. Dishonesty is not considered a problem for anyone except the foolish buyer who did not look before he purchased.


    If China explodes in any form of civil unrest the results for world wide commerce are hard to estimate. The government is not afraid to kill it's citizens to keep power and has a good long streak of improving the basic living conditions of its citizens. A major downturn in the global economy will hurt more in China than in any other country.


    Money is not merely a measure of the productivity of a country, it is also a measure of the stability and long term potential of the country. If China begins to move towards more rule of law there is a chance they can navigate the entry into the next century for the majority of it's citizens. Cash in the bank will do nothing to keep a civil war from destroying China.
    23 Jun 2013, 08:53 PM Reply Like
  • optionsgirl
    , contributor
    Comments (5202) | Send Message
    According to Zero Hedge, China is crashing right now.The Shanghai composite tumbled most since 2009.
    24 Jun 2013, 04:34 AM Reply Like
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