2) The acceleration of government debt financing has boosted the growth rate of social financing stock by 0.12 percentage points. In September, the net financing scale of government bonds was approximately 1.54 trillion yuan, which is more than 540 billion yuan higher than the same period last year.

3) In other sub-items, the combined increase in off-balance-sheet financing projects (entrusted loans, trust loans, and undiscounted bills) was nearly 130 billion yuan less year-on-year, stock financing was nearly 20 billion yuan less year-on-year, and corporate bond financing was 256.1 billion yuan less year-on-year, collectively dragging down the growth rate of social financing by 0.08 percentage points.

From May to September 2024, the reduction in loans within the social financing口径 was less than the same period last year, but the government bond financing continued to increase year-on-year, offsetting its negative impact. Looking forward to the fourth quarter, considering that there is still room for fiscal policy to strengthen, it is expected that government bond financing will continue to support the increase in social financing. It is expected that the scale of government bond financing in the fourth quarter of 2024 can reach more than 3.8 trillion yuan (among them, the scale to be issued arranged by the "Two Sessions" is about 1.5 trillion yuan, we expect that the incremental government bond financing used for debt resolution and budget deficit compensation can reach more than 2.3 trillion yuan, for details, see the previous report "How will active fiscal policy increase"), higher than the 3.65 trillion yuan in the fourth quarter of 2023.

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Medium and long-term loan growth rate falls back

In September 2024, the newly increased RMB loans were 1.59 trillion yuan, a decrease of about 72 billion yuan year-on-year; the year-on-year growth rate of loan stock was 8.1%, down by 0.4 percentage points from the previous month. In terms of structure:

1) The scale of bill discounting increased, supporting the loan growth rate by 0.09 percentage points. In September, bill financing increased by nearly 22 billion yuan year-on-year, and the year-on-year growth rate of bill financing stock reached 12.1%, performing the strongest among the main sub-items.

2) The growth rate of corporate loans fell back, increasing the drag on loan growth by 0.23 percentage points. In September, the balance of corporate short-term and medium and long-term loans grew by 10.2% year-on-year, down by 0.4 percentage points from the previous month. Among them, corporate short-term loans were nearly 11 billion yuan lower than the same period last year, and corporate medium and long-term loans were less than 29 billion yuan year-on-year. According to the data of the central bank, at the end of September, the balance of medium and long-term loans in the manufacturing industry was 13.88 trillion yuan, a year-on-year increase of 14.8%, down by 1.1 percentage points from the end of August; at the end of September, the balance of inclusive small and micro loans was 32.9 trillion yuan, a year-on-year increase of 14.5%, down by 1.5 percentage points from the end of August.

3) The growth rate of resident loans fell back, increasing the drag on loan growth by 0.16 percentage points. In September, the year-on-year growth rate of resident loan stock was 3.1%, down by 0.5 percentage points from the previous month. Looking at the sub-types of resident loans, in September, the stock of resident medium and long-term consumer loans (including personal mortgage loans) grew by 1.0% year-on-year, down by 0.5 percentage points from the previous month; the year-on-year growth rate of resident business loans was 9.9%, down by 1 percentage point from the previous month, already lower than the growth rate of corporate loans; the year-on-year growth rate of resident short-term consumer loan stock was -2.3%, up by 0.3 percentage points from the previous month, and has been negative for 5 consecutive months. From this perspective, to stabilize the growth rate of resident loans, it is necessary to pay attention not only to personal mortgage loans related to real estate but also to the issuance of inclusive small and micro loans and short-term consumer loans.The year-on-year growth rate of M2 has increased significantly

There are three clues in the monetary supply and deposit data:

First, the year-on-year growth rate of M2 has risen, benefiting from the increased activity in the stock market. In September 2024, the year-on-year growth rate of M2 increased by 0.5 percentage points to 6.8%. Although the year-on-year growth rate of various loan balances fell in September, the growth rate of M2 rebounded. Looking at the deposit side, as an important part of M2, deposits related to securities customer margin in non-banking financial institutions increased by 910 billion yuan in September, an increase of 1.6 trillion yuan more than the same period last year, accounting for 0.54% of the M2 stock scale in September 2023, which can basically explain the eye-catching performance of M2.

Second, the "M1-M2 growth rate difference" continues to decline, and the vitality of the domestic economy needs to be consolidated. In September 2024, the year-on-year growth rate of M1 fell by 0.1 percentage points to -7.4%, while the year-on-year growth rate of M2 rebounded, which expanded the "M1-M2 growth rate difference" by 0.6 percentage points to -14.2%. The "M1-M2 growth rate difference" is one of the leading indicators in the economic cycle because it can reflect the expansion of corporate credit and the improvement of profits (the change of corporate demand deposits relative to time deposits), as well as the situation of residents' consumption and savings relocation (the transfer of residents' deposits to corporate demand deposits), and it leads the PPI growth rate by three to four quarters. In September, the "M1-M2 growth rate difference" continued to expand. Against this background, incremental fiscal and monetary policies have been introduced one after another, which may help to stimulate the vitality of the domestic economy and stabilize the price level of industrial products.

Third, based on financial data and high-frequency data, it is estimated that the general fiscal expenditure in September may stabilize and rebound. In September, the net financing scale of government bonds increased by more than 54 billion yuan year-on-year, and the increase in new fiscal deposits was more than 2 billion yuan less than the same period last year. We use the "net financing of government bonds in social financing: year-on-year increase - fiscal deposits: year-on-year increase" in the past year to represent the intensity of fiscal fund allocation, and it is calculated that the intensity of fiscal fund allocation in September increased by nearly 40 billion yuan compared to August; this indicator is basically synchronized with the year-on-year growth rate of general fiscal expenditure, so it can be inferred that the intensity of fiscal expenditure in September has increased. High-frequency data can also verify:

1) According to incomplete statistics from Mysteel, in September 2024, the investment amount of key projects starting in various parts of the country was about 2233.155 billion yuan, a month-on-month increase of 66.78%, and the year-on-year decline was narrowed by 18.9 percentage points compared to the previous month to -38.3%.

2) According to the survey by the Century Construction Network, as of October 1, the fund arrival rate of the sample construction sites was 62.65%, 0.65 percentage points higher than the week of August 23; among them, the fund arrival rate of infrastructure and municipal (non-housing construction) projects was 65.58%, 0.56 percentage points higher than the week of August 23.