Analysis: China’s Narrow M1 Criteria Leave It Vulnerable to Volatility

PBOC governor has suggested including personal demand deposits and highly liquid financial products in the money supply measurement

Jul 03, 2024

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A bank employee counts money. Photo: VCG

Pan Gongsheng, governor of China’s central bank, told the Lujiazui Forum on June 19 that the monetary authority should work on incorporating personal demand deposits and even some highly liquid financial products when measuring M1, which mainly consists of liquid money supply such as cash and corporate demand deposits. This has garnered widespread market attention.

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