And that number is a little over 20% of global GDP. So it's just astonishing and breathtaking and you have to sort of pinch yourself sometimes to sort of realize that it's actually happening."

Yet the expansion has been anything but uniform: while the Federal Reserve balance sheet expanded by nearly $3 trillion from March to May (14% of GDP), the balance sheet of China's PBOC actually contracted by almost RMB 1 trillion from January to June. At the same time, a PBOC official stated in a recent press conference that monetary policy support in H1 was equivalent to RMB9 trillion (9% of GDP).

This begs the question: why didn't the PBOC balance sheet expand during the recent easing cycle? How have various easing measures by the PBOC impacted its balance sheet? And how much room does the PBOC have to grow its balance sheet? In a recent note addressing these questions and more, Goldman provided the answers in a Q&A format.

Why didn't the PBOC balance sheet expand during the recent easing cycle?