Macroeconomic data released in China over the weekend shows that monetary conditions remain loose even if growth momentum has slowed. Even so, for some economists - such as those at Nomura - the projected rise in inflation, to above 3.5 per cent in June, means that authorities will begin to tighten monetary policy later in the year.

So called total social financing (TSF) fell to 1.07trn Renminbi (Rmb) in February from 2.54trn in the previous month.

However, economists at Nomura point out that if volatile short-term bill financing is excluded then TSF came in at Rmb74bn per working day in February, lower than 89bn seen in January, albeit well above the fourth quarter 2012 average rate of 61bn.

Similarly, the growth rate of money supply (M2) slowed to a 15.2% year-on-year pace from the 15.9% seen in the first month of the year, but was still much faster than the 13.8% print for quarter four 2012.

According to Nomura "a large part of the new credit supply may have been used to repay expiring debt and did not go into the real economy."

Retail sales in China grew at 12.3% year-on-year rate in the first two months of 2013, according to the Chinese Bureau of National Statistics, less than the 13.8% seen by economists.

During that same period industrial production increased by 9.9% (Consensus: 10.6%).

Fixed asset investment, excluding rural household, grew by 21.2% in February (Consensus: 20.7%).

Consumer prices gained at a 1.1% month-on-month (3.2% year-on-year) clip in February.

AB

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