PBOC's total social financing rebounded to RMB1.57tn in August

Here are 3 growth drivers.

According to Barclays, the People’s Bank of China (PBOC) reported on 10 September 2013 that August new RMB loans amounted to RMB 711bn. 

To Barclays' surprise, total social financing (TSF) recorded a large rebound of RMB 1.57tn in August (up from RMB 809bn in July), mainly driven by the strong increase in non-bank financing (accounting for 57% of TSF in Aug vs. 28% in Jul), thanks to the big swing in bank acceptance (+RMB 305bn in Aug vs. -RMB 178bn in Jul) and higher growth in entrusted loans (+RMB 294bn in Aug vs. +RMB 193bn in Jul), which were likely helped by stabilized interbank rates and trade activities in Aug.

Here's more from Barclays:

Key drivers for the higher-than-expected Aug TSF, in our view, include the following:

1) big swing in bank acceptance (+RMB 305bn in Aug vs. -RMB 178bn in Jul), which, we believe, could be attributable to the recovery in trade activities (exports growth +7.2% in Aug vs. 5.1% in Jul), as well as the stabilized interbank rates in Aug post the ‘credit crunch event’ in late-Jun;

2) higher growth in entrusted loans (+RMB 294bn in Aug vs. +RMB 193bn in Jul), which could be due to: (a) the stronger credit demand from corporates with more difficulty in getting credit access from banks and bond markets amid the tight general system liquidity; (b) cash-rich corporates lent out money; and

3) stable trust loans (+RMB 108bn in Aug vs. + RMB 107bn in Jul) and the small recovery in corporate bonds (+RMB 123bn in Aug vs. + RMB 46bn in Jul) also supported non-bank financing growth in Aug.