With just one day to go until China’s second quarter GDP release, there was a spot of positive news: strong monthly lending figures.

New loans last month topped forecasts, reaching Rmb919bn, up from Rmb790bn the previous month.

Zhang Zhiwei at Nomura saw the figures as a reason for optimism:

This data set is another positive signal and we believe helps confirm that policy easing is indeed on its way, reinforcing our view that growth will bottom in Q2 and rebound in H2. We expect new loans to remain at a high level in the coming months, as speeches by Premier Wen in the last few days have indicated that policy easing will pick up speed and that the government will likely push investment growth further.

But a month’s loan data will do little to calm fears if Friday’s GDP comes in at the lower end of forecasts. While the consensus is for 7.6 per cent growth, some have a more negative view. Citi expects at figure of just 7.3 per cent – something that could put China into “hard landing” territory.

Related reading:
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