Back in 2016 and 2017, M1 growth was meaningfully faster than M2 growth in China, which typically indicates a high willingness to spend or invest in the economy.
That is a bullish sign.
On the contrary, if M1 growth is below M2 growth by a wide margin, it usually indicates people would rather save more than spend or invest.
That negative gap was deepening throughout 2024 till the famous 924 stimulus.
Using revised M1 growth rate, the negative gap was about -5% at the beginning of 2024 and about -10% in Sep 2024.
That negative gap shrunk to about -1% in Sep 2025 and about -3% in Feb 2026.
Actually, looking at M2 growth alone might give you a glimpse of China’s economy pulse and sentiment.
