China New Yuan Loans Remain Subdued

Chinese banks extended CNY 910 billion in new yuan loans in December 2025, sharply higher than CNY 390 billion in November. Although lending remained below the CNY 990 billion recorded a year earlier, it exceeded market expectations of around CNY 800 billion, underscoring the impact of policy-based financing tools and government stimulus measures that are beginning to support credit demand. Total social financing, a broad gauge of credit and liquidity, rose to CNY 2,210 billion, down from CNY 2,490 billion in November and CNY 2,860 billion a year earlier. Outstanding loan growth held steady at a record-low 6.4%, well below the 7.6% pace seen a year ago but slightly above market expectations of 6.3%.

Chinese banks extended CNY 390 billion in new yuan loans in November 2025, up from CNY 220 billion in October but below both last year’s CNY 580 billion and market expectations of CNY 500 billion. The data indicate that credit demand remains weak, as soft household demand continues to weigh on stimulus efforts. Meanwhile, total social financing, a broad measure of credit and liquidity in the economy, rose to CNY 2490 billion, above October’s CNY 810 billion and last year’s CNY 2340 billion. Loan growth also slowed to 6.4%, a new low since at least 1998, down from 6.5% in the previous period and 7.7% a year earlier.

New yuan loans in China dropped sharply to CNY 220 billion in October 2025, down from CNY 1290 billion in September and CNY 500 billion in the same month last year. The figure also came in well below market expectations of CNY 500 billion, underscoring continued weakness in credit demand. The sharp decline highlights subdued consumer spending and broader economic softness, posing a significant challenge for policymakers seeking to support China’s slowing economy. Household loans, including mortgages, contracted by CNY 360.4 billion and corporate loans dropped to CNY 350 billion. Meanwhile, total social financing which is a broad measure of credit and liquidity in the economy, decreased to CNY 810 billion from CNY 3530 billion in September and above forecasts of CNY 12300 billion. It was also lower than CNY 1400 billion a year earlier. Loan growth also slowed to 6.5%, the least since at least 1998, below forecasts of 6.6% and 7.8% a year earlier.