New Yuan Lending Rises Less Than Expected

In September 2025, China's new yuan loans rose significantly to CNY 1.29 trillion, more than doubling August's CNY 590 billion. This surge was driven by seasonal factors that traditionally stimulate lending in September. Nonetheless, the figure fell short of the anticipated CNY 1.47 trillion and was also below the CNY 1.59 trillion recorded in the same period last year, indicating slower government bond issuance and subdued credit demand. On another note, total social financing, a comprehensive indicator of credit and liquidity in the economy encompassing off-balance sheet financing like initial public offerings, trust company loans, and bond sales, climbed to CNY 3,530 billion from August's CNY 2,567 billion, exceeding predictions of CNY 3,320 billion. Despite this increase, it still lagged behind the CNY 3,760 billion registered a year prior. Additionally, loan growth decelerated to 6.6% from 6.8%, falling short of the forecasted 6.7% and significantly lower than 8.1% recorded a year earlier.

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