Chinese banks issued 1.89 billion yuan in new loans in May, which marks a month-on-month increase of 1.24 trillion yuan (193%) and a year-on-year increase of 390 billion yuan (26%).  As we had discussed, lending had been likely to increase as the central government continues to work to stimulate the economy.  Also of note is outstanding loan growth came in at 11%, which marks the first time that growth has increased since June 2021.  In April, outstanding loan growth fell to 10.9%, which marked the lowest level seen in over ten years.

Overall, it remains very significant to us that the Chinese government is continuing to work to stimulate their economy while other governments are beginning to tighten.  Sixty-four nations have so far raised interest rates this year, while two (China and Russia) have cut rates.  We remain concerned for much of the global economy, and we continue to believe that something will ultimately break this year.  So far nothing has broken yet in the global economy or financial system.