Usually, the best way to compare the two is to measure the month containing Chinese New Year with the previous year's month for Chinese New Year, although this cannot mitigate the issues with Chinese New Year impacting the end of January and the beginning of February. In that case, the only accurate comparison is between Q1 of one year and Q1 of the next year.
China's currency in circulation (M0) is an example of an indicator that is impacted significantly by the timing of the Chinese New Year. January 2015's value decreased by -17.58% over the previous 12 months, but February 2015's value increased 16.97% over the previous 12 months. This information is not very useful.
One trend that is noticeable is that the Chinese New Year spike in 2015 was lower than the spike in 2014. In the data available, this only happened back in 2002. However, that decrease was only -1.72%, and there was an abnormally large increase in bank reserves to make up for it. The drop in 2015 was -4.69%, and with no abnormal increase in bank reserves.
Now that May's numbers have been released, we can see annual growth figures that are not impacted by the Chinese New Year.
M0 in May grew at its lowest rate ever for the available data in comparable months. Previously, the growth rate had never dropped below 6.00%, but now it already down to 1.77%.
M1 in May grew at its second lowest rate for the available data in comparable months. Perhaps this is the new normal?
Despite cutting interest rates and reserve requirements, the Chinese money supply seems to be losing steam. Could the Year of the Goat be the year the credit addict experiences withdrawals?
