In our recent discussions with clients, we have found differing views on the state of China’s credit growth and the credit impulse this year. This brief note summarizes our assessment of China’s credit conditions so far in 2020, and the outlook for the next six to nine months. Overall credit growth rates are stronger, around 10-11%, and the credit impulse is positive, but credit growth likely peaked in June. Property sector restrictions should weaken credit growth in the coming months, and shadow banking channels continue contracting. In addition, credit has been distributed unevenly across provinces, stalling the recovery.
