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China's Credit Target Implies Adding Entire German GDP This Year

  • Pace of leverage increase will be slowing, UBS economist says
  • Money supply growth target cut to 12%, outpacing 2016 increase

China’s credit engine will keep humming this year, adding the rough equivalent of Germany’s annual economic output to its already massive stock of total social financing, according to estimates derived from the nation’s 2017 targets.

Adding higher equity market financing and about 5 trillion yuan ($725 billion) worth of local government bond swaps to the official credit growth target of 12 percent, analysts at UBS Group AG see TSF expansion of 14.8 percent this year. They calculate that’s equal to a whopping 23 trillion yuan, or $3.3 trillion, addition to the amount of total credit already swishing around the world’s second-largest economy.