China’s credit growth picked up in June amid strong demand for loans via banks and informal channels, signaling that the economic recovery is continuing into the third quarter. Modest policy stimulus coupled with progress in battling the virus at home has led to an increasingly solid recovery in the world’s second largest economy, with output data for the second quarter due next week set to show a return to growth. At the same time, China remains vulnerable to renewed virus outbreaks, as well as the weakness of global demand for its export goods. “Credit easing remains supportive for economic recovery,” Barclays Bank Plc economists including Yingke Zhou wrote in a note. “We expect credit growth to rise further in the second half on larger scale government bond issuance and sustained targeted easing to small- and medium-sized firms.” Broad M2 money supply grew 11.1% from a year earlier. The stock of outstanding credit rose 12.8% in the month, the fastest pace since February 2018.