According to People’s Bank of China’s latest release, in March 2013, M2, China’s broadest measure of money supply, reached 103.61 trillion yuan for the first time. Over the past 10 years, China’s M2 money supply has risen sixfold from 13 trillion yuan in 2000. It was just below 50 trillion yuan in 2008. However, starting in 2009, M2 increased 10 trillion every year. In 2012, it exceeded 97 trillion.
Currently, the ratio of China’s M2 to GDP is close to 190 percent. This number brings to light a clear acceleration when compared to recent years. It reflects the reality of a decreased return on investment and a narrowing path of economic growth driven by money supply.
Source: People’s Daily, April 12, 2013