China’s Money Printing Press Goes Wild

China’s M2 money supply has doubled since the collapse of Lehman Brothers.  M2 money supply currently stands at around RMB90 trillion, and it was at about RMB45 trillion the month before Lehman collapsed.  Thus the so-called RMB4 trillion stimulus after Lehman’s collapse (which is more like a RMB8 trillion fiscal stimulus in reality) has translated into a RMB45 trillion increase in M2 money supply.

By contrast, Ben Bernanke’s much maligned money printing pales into insignificance. Over the same period, M2 money supply in the US has only increased by some 27%:

After all, China was the country which invented both paper and printing (alright, that was a joke, that’s not really relevant).
Meanwhile, in other monetary news, the detailed statistics of May 2012 shows that the position for forex purchases was almost flat for May, increasing by just RMB23 billion to RMB25.612 trillion.

Taking the May trade surplus into account, capital flow was negative, implying an outflow of RMB95 billion, a second consecutive month of negative readings for this measure.  Since October 2011, a total of RMB447 billion has left the country even taking the positive flow in February and March into account, and that is already worse than capital outflow during the financial crisis in 2008: