China's New RMB Loans Rose 10.38 Trillion Yuan in First Seven Months

China's new yuan-denominated loans expanded by 10.38 trillion yuan in the first seven months of the year, bringing total outstanding RMB loans to 282.29 trillion yuan, up 5.1 percent year-on-year, according to data released by the People's Bank of China. While corporate and institutional lending drove credit expansion with an 11 trillion yuan increase, household loans shrank by 827.1 billion yuan. Broad money supply (M2) rose 7.7 percent, while total social financing increment fell by 1.74 trillion yuan compared to the same period last year.

The credit figures reflect persistent divergence in domestic borrowing demand. Strong corporate and medium-to-long-term lending indicates continued state-guided support for infrastructure and manufacturing, but the contraction in household borrowing underscores cautious consumer sentiment and softness in the residential property market. This divergence will serve as a key metric for policymakers considering additional monetary easing and targeted fiscal stimulus in the second half of the year.

China's financial institutions extended 10.38 trillion yuan in new yuan-denominated loans during the first seven months of the year, maintaining moderate credit expansion, according to official data released by the People's Bank of China. At the end of July, the outstanding balance of RMB loans stood at 282.29 trillion yuan, representing a 5.1 percent increase compared to the same period a year earlier, state media reported. The lending breakdown highlights a pronounced contrast between corporate borrowers and the household sector. Loans to enterprises and public institutions increased by 11 trillion yuan over the seven-month period, driven largely by long-term financing needs. Medium- and long-term corporate loans rose by 5.32 trillion yuan, reflecting ongoing financial support for key industrial and infrastructure projects. In contrast, household loans contracted by 827.1 billion yuan, pointing to subdued demand for personal consumer loans and mortgages. On the funding side, total RMB deposits grew by 17.79 trillion yuan from January through July. Household deposits accounted for 6.95 trillion yuan of that increase, reflecting sustained high savings preferences among consumers. Money supply metrics indicated stable liquidity conditions across the banking system. The broad money supply (M2) reached 355.51 trillion yuan at the end of July, rising 7.7 percent year-on-year. Narrow money supply (M1) stood at 115.46 trillion yuan, up 4 percent, while currency in circulation (M0) climbed 11.6 percent to 14.82 trillion yuan. Aggregate financing to the real economy (AFRE)—a broad measure of credit and liquidity across the financial sector—expanded by an incremental 22.25 trillion yuan during the first seven months. This was 1.74 trillion yuan lower than the increment recorded during the corresponding period last year. By the end of July, the total stock of social financing reached 463.27 trillion yuan, representing a 7.4 percent year-on-year growth rate.