Lots of people persist in pointing to improvements in China’s PMI as reason that the country’s economy is bottoming. Is it, however? As Michael Pettis points out, it’s tough to support the idea that China is bouncing back “surprisingly fast” if you actually look at the credit data in-country.
Surprisingly fast? I’ll take that bet. Aside from the normal excitement we all get from the right kinds of stimuli, part of the recent optimism seems to reflect the huge upsurge in bank lending I reported last week – with loans in January rising by RMB 1.3 trillion. Nearly one-quarter of that was provided just by ICBC.
Read the whole thing.