China’s social financing situation exhibited signs of improvement in August, according to a research report by China Merchants Securities, aligning with market expectations. The report attributes this improvement to factors such as increased government bond issuance and banks utilizing banknotes to recharge loans. However, the sustainability of this positive trend is the market’s next concern, as highlighted by the report.
Recently, the central bank and the State Administration of Financial Supervision introduced a series of real estate policies aimed at stimulating demand for home replacement. The objective behind these policies is to boost residents’ willingness to lend. The report notes that the property market in first-tier cities has already displayed significant improvement in the first week of September. Previously, there was a wait-and-see sentiment among potential buyers, but now this demand has begun to enter the market. This may provide short-term support for credit growth.
Nevertheless, the report emphasizes that reversing expectations in the real estate market is a gradual process. While short-term improvements have been observed, it will take time for sustained growth. Looking ahead to the fourth quarter, the growth rate of social financing is projected to remain stable, with estimations that the peak for the entire year may still hover around 10%.
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