While editorializing around reports that top Chinese policymakers are mulling new stimulus measures to bolster a moribund economy, I wrote, of the PBoC, that impaired credit demand may limit monetary policy’s effectiveness.

With that in mind, note that credit growth data for May, released on Tuesday, was indeed weak, suggesting the MLF cut foreshadowed by a reduction in the seven-day reverse repo rate was in part motivated by yet another month of relatively lackluster credit creation.

New yuan loans were 1.4 trillion last month, the PBoC said. Aggregate financing was 1.6 trillion. That sounds like a lot but… well, look at the chart.

If you’re not familiar with the figures and what goes into them, just focus on the “beat” or “miss” aspect. These prints were misses. And they come on the heels of very soft inflation data, which in the Chinese context in 2023 is a bad thing.

Bottom line: The Chinese economy lacks “dynamism,” as one economist put it. That goes both for corporates and households.

This is the sort of data that’s absolutely bleeding sentiment around China’s faltering (read: nonexistent) recovery. The June vintage of BofA’s Global Fund Manager survey, also released on Tuesday, showed investors continuing to revise their outlook lower.

“[The] big rally in China growth expectations has completely reversed back to November levels,” BofA’s Michael Hartnett said.

Note that in January, 91% of panelists in BofA’s monthly poll expected stronger economic growth out of China.

I won’t say “I told you so.” Except that I just said it.