China's revision of its M1 money supply calculation in January 2025, which now encompasses individual checking accounts and assets held in non-bank financial institutions, seeks to deliver a clearer understanding of liquidity within its economy. The reported surge from $67 trillion in December 2024 to $112 trillion in January 2025 has ignited discussions, with some viewing it as a strategy to obscure underlying economic issues, such as a potential deflationary debt spiral.
The People's Bank of China has declared a "moderately loose" monetary policy for 2025, aiming to boost the money supply and lower interest rates to foster economic growth, a move that may be connected to the M1 recalibration. This shift takes place against a backdrop of broader macroeconomic adjustments, including a 5% GDP growth target and initiatives to stabilize the real estate sector, as detailed in China's 14th Five-Year Plan for 2025.
The People's Bank of China has declared a "moderately loose" monetary policy for 2025, aiming to boost the money supply and lower interest rates to foster economic growth, a move that may be connected to the M1 recalibration. This shift takes place against a backdrop of broader macroeconomic adjustments, including a 5% GDP growth target and initiatives to stabilize the real estate sector, as detailed in China's 14th Five-Year Plan for 2025.
Note
The Hang Seng Index #HSI on the quarterly chart is (I Believe) in a wyckoff accumulation range building for a breakout to the upside. Note the bullish engulfing that is forming.
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