China’s September Credit Growth Seen Slowing on Tepid Demand, Less State Borrowing
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China’s new lending and overall credit growth likely declined in September from a year earlier, according to a Caixin survey, underscoring persistent weakness in borrowing demand and shifting patterns in government bond issuance.
The median forecast from a Caixin survey of 16 financial institutions projects 1.45 trillion yuan ($203 billion) in new yuan loans for September, down from 1.59 trillion yuan in the same month a year earlier. Total social financing, a broad measure that captures both traditional loans and off-balance-sheet credit, is expected to fall to 3.29 trillion yuan from 3.76 trillion yuan a year ago.
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- China’s new yuan loans in September are projected at 1.45 trillion yuan, down from 1.59 trillion yuan a year earlier; total social financing is expected to fall to 3.29 trillion yuan from 3.76 trillion.
- Weak borrowing demand persists, driven by a sluggish property market and a drop in government bond issuance due to earlier front-loaded fiscal spending.
- M2 money supply growth is forecast at 8.5% year-on-year, slightly down from August’s 8.8%, with key interest rates expected to remain unchanged.
- Huatai Securities Co. Ltd.
- Huatai Securities Co. Ltd. employs Yi Huan as its chief macroeconomist. Yi Huan commented that the overall financing demand from the real economy remains weak, and she also noted that a 500-billion-yuan policy-backed financial facility could support credit expansion and infrastructure investment in the fourth quarter.
- Nomura
- Nomura is referenced through its Chief China Economist, Lu Ting. Lu Ting reported that net government bond sales through Sept. 26 totaled 1.209 trillion yuan. This figure is significantly lower than the 1.495 trillion yuan issued during the same period in 2024, highlighting a substantial year-on-year drop in net government bond issuance.
- Citic Securities Co. Ltd.
- Yang Fan, chief macro and policy analyst at Citic Securities Co. Ltd., noted that a decline in net government bond sales is due to a shift in the issuance calendar, with this year's sales concentrated in earlier months compared to last year's backloaded approach.
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