Chinese leaders often announce grand plans for new projects, but leave the details of funding to local governments and the banking system. As a result, monitoring flows of credit, particularly at the provincial level, can highlight more significant changes in economic conditions masked by the apparent stability of the official data. This approach has been particularly relevant in 2016, as credit growth has been concentrated in only a few provinces dominated by frothy property markets, while infrastructure construction does not appear to be funded at higher levels than in previous years.
