China’s M2 broad measure of money supply reached 41.78 trillion yuan (about $5.81 trillion) as of the end of January, up 18.94% from a year earlier.
The increment was 2.2 percentage points higher than the number as of the end of 2007, said the central bank in a statement on Thursday. During the same period, the narrow measure of money supply, M1, rose 20.72% to 15.49 trillion yuan but the increment was 0.33 percentage points lower than the end of 2007, the People’s Bank of China said. M2 covers cash in circulation plus all deposits, while M1 covers cash in circulation and corporate demand deposits. Meanwhile, the outstanding amount of M0, or cash in circulation, hit 3.67 trillion yuan, up 31.21% from the same point last year. The figures indicate liquidity remains strong in the Chinese economy, despite repeated government efforts to rein in liquidity amid fears it could lead to an overheating of the economy. (people.com.cn)