China's Credit Growth Surges, Impacting Bitcoin and Investment Push
China's credit impulse index, which measures the change in new credit or bank lending as a percentage of the gross domestic product, has bounced from 24% to 26% this year, indicating a renewed credit expansion relative to the growth rate. A continued rise in China's credit impulse could contribute to the global financial cycle and support global risk sentiment, expanding global asset prices and global credit, according to a paper published by the Federal Reserve in November. Historically, there has been a strong correlation between China's credit impulse and Asian equity markets, and previous instances of renewed credit expansion in China have coincided with major bearish-to-bullish trend changes in bitcoin.