The People's Bank of China headquarters in Beijing. Tomohiro Ohsumi | Bloomberg | Getty Images

New loans in China surged to a record high in January — and analysts say it could be a sign that government stimulus is "finally kicking in," which may be good news for the economy. The world's second-largest economy expanded 6.6 percent in 2018, the slowest growth in 28 years. The slowdown was in part due to official efforts to reduce alarmingly high debt levels which started three years ago. Clamping down on credit, in particular non-traditional forms of lending known as "shadow banking," suppressed economic activity and pushed growth lower. But the onset of the tariff war with the United States and the pace of the slowdown forced a rethink. Last year, authorities began taking steps to encourage banks to lend more, cut taxes and support small- and medium-sized companies.

Record loans

Bank loans and total social financing — the country's broadest measure of credit — rose to a record high in January, according to China's central bank on Feb. 15. New yuan loans hit 3.23 trillion yuan ($481.76 billion), while total social financing — which measures loans and bonds among other things — reached 4.64 trillion yuan. Those numbers took analysts by surprise. The credit growth "indicates that the PBoC's easing efforts are finally kicking in, as liquidity is passed on from financial institutions to the real economy," Bank of America Merrill Lynch said in a note the day the data came out.

Jian Chang, chief economist for China at Barclays, said that credit has expanded "quite significantly" and she expects economic growth to pick up in the second-quarter, after bottoming out in the current first quarter. Such a scenario depends on "more policy easing from the Chinese government," Chang told CNBC on Tuesday — a view echoed by other economists who say the government will likely accelerate stimulus to boost economic growth.

Too early to tell