China New Bank Loans

Chinese banks extended CNY 280 billion in new yuan loans in April of 2025, firmly below the CNY 730 billion from the corresponding period of the previous year and less than market expectations of CNY 700 billion, to reflect the lowest new credit extension for the period since 2005. The slump reflected the initial impact of the trade war with the United States, hampering business and household appetite for new credit. In turn, total social financing, which encompasses the total volume of financing provided by the financial system to the real economy, grew by CNY 1.16 trillion in the period to align with the central government's pledge of increase bond sales, especially through their ultra-long-term special debt issuing later in the month. Additionally, outstanding loan growth rose by 7.2% for a second month, and a broad measure of money supply rose by 8% annually, the sharpest increase in over one year.