China’s Central Bank Says Loans No Longer Best Gauge of Economic Support
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China’s central bank is telling markets to look beyond traditional bank lending to gauge financial support for the economy, pointing to broader metrics like aggregate financing and money supply as more accurate indicators.
In a column in its third-quarter 2025 monetary policy report released Tuesday, the People’s Bank of China (PBOC) argued that these comprehensive measures better reflect the state of the economy as financing channels become more diverse.
Historically, observers have closely watched bank loan growth to assess China’s economic health. However, the PBOC noted that the structure of financing has changed significantly.
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- China’s central bank urges markets to prioritize aggregate financing and money supply over traditional bank lending to gauge economic support.
- In the first three quarters of 2025, new yuan loans’ share in aggregate financing fell to 48.3%, while direct financing rose to 44.4%.
- The shift toward technology and service sectors is leading to slower credit growth and reflects China’s emphasis on sustainable, higher-quality development.
- People’s Bank of China
- The People's Bank of China (PBOC), China's central bank, is advising markets to evaluate financial support for the economy using broader metrics like aggregate financing and money supply, rather than solely traditional bank lending. In its third-quarter 2025 monetary policy report, the PBOC argued these comprehensive measures more accurately reflect the economy's state given diversifying financing channels.
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