A posting on social platform X discussed why the record high of 28 trillion yuan (US$4 trillion) currency that China issued in 2023 didn’t lead to the expect result of boosting economy:
The excess currency, primarily intended to circulate through loans, encountered a lack of demand. Individuals and businesses refrained from borrowing, causing the money to passively flow back, resulting in passive deleveraging. Traditionally, a significant portion of loans flowed into real estate which would drive up development and consumption. But this time the reduced demand (and the dismal projected return) for property purchases and land acquisitions led to idle funds in commercial banks. Consequently, most of the 28 trillion yuan were returned to China’s central bank. The government became the primary borrower, with local governments issuing new city investment bonds to replace old bonds approaching maturity. The total amount of investment bonds issued by city governments in China now exceeds 65 trillion yuan.
Source: Twitter, @TheXiangYang
2023年诞生了人类历史上单一经济体印货币最多的国家—中国。28万亿，相当于多印了一个德国。既然超发了这么多的货币，股市没有涨，楼市没有涨，就连物价也没有明显的上涨。那超发了这些货币都到哪里去了？其实别管放多少钱的水，它不会直接平均到每个人。而是通过银行发放贷款，企业拿到贷款之后扩大业…
— Xiang Yang 向阳 (@TheXiangYang) December 21, 2023