China’s November Lending Slumps as Households Pull Back
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Bank lending in China weakened in November, falling below market expectations, as households pulled back on borrowing despite a surge in government bond issuance that pushed broader credit growth higher.
Chinese banks issued 390 billion yuan ($55.2 billion) in new yuan loans last month, according to data released Friday by the People’s Bank of China. The total marked a decline of 190 billion yuan from the same month a year ago and came in near the bottom of forecasts in a Caixin survey of 13 institutions, which ranged from 300 billion yuan to 893 billion yuan. The average estimate was 507.7 billion yuan.
In contrast, total social financing, a broader gauge of credit that includes government and corporate bonds, expanded by 2.5 trillion yuan, up by roughly 160 billion yuan from a year earlier and topping the average forecast of 2.2 trillion yuan.
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- Chinese banks issued 390 billion yuan in new loans in November, 190 billion yuan less than last year and below forecasts, while household loans shrank by 206.3 billion yuan.
- Total social financing rose by 2.5 trillion yuan, driven mainly by strong government and corporate bond issuance.
- Money supply growth slowed, with M2 up 8% and M1 up 4.9% year-over-year, reflecting weak investment sentiment and a shift in policy focus toward interest rates.
- Soochow Securities Co. Ltd.
- Lu Zhe, the chief economist at **Soochow Securities Co. Ltd.**, commented on China's weakening bank lending in November. He highlighted that despite subsidies and shopping events, short-term loan demand remained soft. Lu Zhe also noted the stagnation in long-term loan growth due to the faltering property market. He further observed a shift in monetary policy focus, with the Central Economic Work Conference omitting specific language on M2 and TSF growth targets.
- China International Capital Corp. Ltd.
- According to the article, Lin Yingqi, a banking analyst at China International Capital Corp. Ltd., suggests that the increase in short-term corporate lending is likely due to banks striving to meet year-end quotas, not an improvement in business confidence. He anticipates banks will reduce credit issuance until early 2026.
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