Commentary: Beijing Needs a Two-Pronged Policy to Revive Investment
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China’s headline credit figures appear stable, but a look beneath the surface reveals an alarming trend: the engine of organic economic growth is sputtering. Without a decisive policy shift to revive private-sector demand, Beijing’s growth targets may soon be at risk.
As of the end of November, China’s total social financing — the nation’s broadest measure of credit — was holding steady at an annualized pace above 36 trillion yuan (about $5 trillion). While government financing remains robust at a 15 trillion yuan ($2.1 trillion) annual rate, borrowing by the non-government sector is flashing warning signs.
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- China's headline credit remains above 36 trillion yuan, but medium- and long-term loans to companies and households have dropped for five months, signaling weakening organic growth.
- Private investment has fallen below 50% of total fixed-asset investment; household mortgage lending and consumer credit are both declining, with new home loans at just 1.57 trillion yuan annualized.
- Beijing plans a major fiscal push for 2026, including increased infrastructure investment and lower interest rates, to revive private-sector demand and credit growth.
- China Construction Bank
- Zhang Tao and Lu Siyuan, who work in the financial markets department at China Construction Bank, authored the article. Their views expressed therein are their own and not necessarily reflective of Caixin's positions.
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