Last month, the People’s Bank of China (PBoC) released the aggregate finance data for December 2024. Also known as total social financing (TSF), this is a broad measure of credit and liquidity in the economy that includes off-balance sheet forms of financing such as initial public offerings, loans from trust companies, and bond sales. It is the PBoC’s preferred measure of total non-financial debt in the Chinese economy. Although a growing amount of debt is not captured in the TSF data (for example, late payments to businesses and workers by local governments caught in a cash squeeze), most analysts use TSF as a reasonable proxy for the evolution of Chinese debt. […]