BEIJING (Reuters – China’s new bank loans likely declined in December. But, the total year of lending to China was a record. A Reuters poll revealed that the central banks maintained economic policy support.

According to the survey, 1.25 trillion Yuan ($196.06 Billion) was the net amount of loans issued by Chinese banks in December. This is down from November’s 1.27 trillion Yuan.

If the December data that is due this week matches forecasts, the total amount of new loans in 2021 would be 20.07 Trillion Yuan. That’s 2.2% more than the record 19.63 Trillion Yuan set in 2020.

China’s central banking cut its reserve requirement ratio (RRR), for banks, Dec. 15. It made the second such move in 2021.

To support small businesses and the rural sector, the central bank reduced the rate on its relending facility by 25%.

A property crash and COVID-19 regulations that severely restrict consumption have created multiple problems for the economy in 2022. This has put the pressure on banks and central banks to ease up their policies.

China will implement a proactive fiscal policy, and prudent monetary policy through 2022. The Politburo, China’s highest-ranking decision making body, stated that it will maintain economic operations in a manageable range through 2022.

Broad M2 money supply growth was 8.7% in December, as compared to 8.5% last month.

As compared to November, outstanding loans in yuan were projected to rise 11.7% in December.

Beijing relied heavily on fiscal stimulus in order to weather downturn. This included cutting taxes and issuing bonds from local governments to finance infrastructure projects.

Accelerating government bond issuance may increase total social financing (TSF), which is a large measure of credit or liquidity.

China has issued 1.46 Trillion Yuan ($229.30billion) as part of the 2022 Advance Quota for Local Government Special Bonds to support investment.

TSF will fall to 2.45 Trillion Yuan by December from November’s 2.61 Trillion yuan.

($1 = 6.3756 renminbi)