At present, the Chinese economy is in the process of stabilizing the bottom, but the pressure on this process is still relatively large. Economic and financial data show that the foundation for stabilizing is not yet solid and still requires hard work.

Medium and long-term loans of enterprises have obviously fallen

The medium and long-term loans of enterprises fell sharply in April, indicating that the current total demand is insufficient.

According to data released by the People's Bank of China, RMB loans increased by 1.02 trillion yuan in April, a year-on-year increase of 161.5 billion yuan, down 40% from the previous month.

In terms of sub-sectors, loans from non-financial enterprises and government organizations increased by 347.1 billion yuan, of which short-term loans decreased by 141.7 billion yuan, medium and long-term loans increased by 282.3 billion yuan, bill financing increased by 187.4 billion yuan, and loans from non-banking financial institutions increased by 141.7 billion yuan. .

Compared with March, the short-term new loans of enterprises have been turned negative, and the net reduction is very large. At the same time, the medium and long-term new loans of enterprises have also dropped significantly.

The monthly single-month and quarter-on-month declines in credit, especially the short-term loans and medium- and long-term loans increased simultaneously. This may be a comprehensive manifestation of insufficient physical financing needs and marginal adjustment of monetary policy, among which demand or main reasons.

From the perspective of the corporate sector, the slowdown in corporate loan growth is worthy of attention. This shows that banks and other financial institutions have experienced a sharp increase in credit at the beginning of this year, which may be more obvious for the consumption of later stock projects.

From the perspective of loan investment, the current loan demand is mainly based on infrastructure and real estate, while industrial demand is still weak. In terms of infrastructure, combined with the issuance of local bonds in April, the speed of local government funds may also slow down, which may affect the speed of infrastructure investment.

According to data released by the central bank, the net financing of local government special bonds was 167.9 billion yuan, showing signs of slowing down.

From the household sector, the household sector loans increased by 525.8 billion yuan, of which short-term loans increased by 109.3 billion yuan, which may be mainly affected by seasonal factors, but still higher than the historical period, reflecting consumer loans. Still welcomed by both the supply and demand sides. Medium and long-term loans increased by 416.5 billion yuan, still at a high level, reflecting the steady state of real estate sales.

M1 growth rate is a new low in ten years

According to data released by the central bank, at the end of April, the broad money (M2) balance was 188.47 trillion yuan, an increase of 8.5% year-on-year. The growth rate was 0.1 percentage points lower than the end of last month, 0.2 percentage points higher than the same period of the previous year, and the growth rate of social financing was released. The slow trend is consistent.

The narrow money (M1) balance was 54.06 trillion yuan, a year-on-year increase of 2.9%, and the growth rate was 1.7 and 4.3 percentage points lower than the end of last month and the same period of last year. After deducting the 5% tailing factor, the new price increase factor was significantly negative, and the M1 was the lowest level in the same period in a decade.

The sharp decline in M1 growth rate shows that the cash and deposit dynamism of the corporate sector has declined, which is related to the business situation of the company. This trend of amateur corporate deposit structure is matched.

From the structure of new deposits, the growth of corporate sector deposits in April was significantly weaker than that of the same period last year. The improvement in cash flow in the corporate sector in March failed to continue.

This is consistent with the slowdown in corporate sector lending growth, which the research institute believes may also mean that the previous rebound in industrial enterprise profit growth has not continued.

According to central bank data, RMB deposits increased by 260.6 billion yuan in April, a year-on-year increase of 274.6 billion yuan. Among them, household deposits decreased by 624.8 billion yuan, non-financial corporate deposits decreased by 173.8 billion yuan, fiscal deposits increased by 534.7 billion yuan, and non-banking financial institutions increased by 278.5 billion yuan.

Core CPI fell to a low level in the past three years

In April, CPI increased by 2.5% year-on-year, and PPI increased by 0.9% year-on-year. Both of them rebounded from March and were significantly stronger than seasonal. However, from the sub-item data, it can still reflect the fatigue of economic operation.

According to data released by the National Bureau of Statistics, from the same period of last year, the CPI rose by 2.5%, an increase of 0.2 percentage points over the previous month. Among them, food prices rose by 6.1%, affecting CPI by about 1.19 percentage points; non-food prices rose by 1.7%, affecting CPI by about 1.35 percentage points.

Food prices have risen significantly above seasonality, and non-food prices have risen below seasonality.

In food, the price of pork was the most obvious due to the impact of swine fever. Pork prices rose by 14.4%, an increase of 9.3 percentage points over the previous month, affecting CPI rose by about 0.31 percentage points.

In non-food, health care, education, culture, entertainment, and residential prices rose by 2.6%, 2.5%, and 2.0%, respectively, which together affected CPI by about 0.93 percentage points.

Excluding volatile food and energy, the core CPI growth rate in April fell to 1.7%, returning to the low point since September 2016.

The PPI operation in April was also stronger than seasonal, but mainly driven by the upstream and food processing industries. The downstream clothing, general and consumer durables continued to be weak, and downstream industrial prices were weak. It can be foreseen that the growth rate of PPI driven by the food processing industry is not sustainable.

PMI falls, economic expansion slows down

As a leading indicator of the economy, the Purchasing Managers' Index PMI also showed a downward trend in April and hit a low this year. This shows signs of a slowdown in manufacturing operations, which account for a relatively high GDP.

According to data released by the National Bureau of Statistics, in April, the manufacturing PMI was 50.1%, which was above the critical point for two consecutive months, down 0.4 percentage points from the previous month.

From the breakdown of the sub-data, both the production index and the new order index have fallen, indicating that current aggregate demand is weaker than before. The production index and the new order index were 52.1% and 51.4%, respectively, down 0.6 and 0.2 percentage points from the previous month.

At the same time, the employee index fell by 0.4 percentage points, showing a downward trend for five consecutive months, indicating that manufacturing employment has accelerated. Although the new export order index and import index have rebounded, they are still in the contraction range.

The expected index of production and operation activities fell again after two consecutive months of improvement. It recorded 56.5 in April, down 0.3 percentage points from the previous month and still the second highest since September 2018.

Overall, the April PMI index showed that the overall production and operation activities of the company continued to expand, but the pace has slowed down.

According to industry data, the consumption of coal for power generation in April was down from the same period of last year, indicating that industrial production slowed down in April. The progress of local bond issuance also showed a slowdown, indicating that the future growth of fiscal expenditure will be limited.

In addition, external demand is weak, and the government is cautious about real estate recovery. Many research institutions believe that the economy may still slow down in the coming months.