On the left, the grey line is credit impulse, which measures the year-over-year change in credit flow as a percentage of nominal GDP. This is useful to see if the Chinese authorities are allowing credit growth to expand at a much faster (or slower) rate relative to the size of the economy. Usually this measure picks up during economic downturn, as the authorities allow faster credit growth to boost activities. We also note a close relationship between China's credit impulse and the new orders component in global Purchasing Managers' Index, reflecting the importance of China as a driver to global growth.
On the right, a number of benchmark interest rates are shown, but the People's Bank of China has been using the loan prime rate and medium-term lending facilities as benchmarks. Even so, they have not been adjusted frequently to influence credit growth. On top of key interest rates, the central bank also adjust the required reserve ratio to direct liquidity to selected sectors.