Bank lending in China shrank in October, with repayments exceeding new loans by 100 billion yuan, the People’s Bank of China said in its monthly financial statistics, released on 13 November.
It was the third month this year in which lending contracted, after declines in April and July, and it confounded economists who had expected new lending to grow. A survey of 11 domestic and international institutions had a mean forecast of 89.7 billion yuan in new October loans; instead, the stock of loans fell.
Outstanding yuan loans stood at 283.33 trillion yuan at the end of October, up 4.7 per cent from a year earlier. That was the slowest annual growth rate in the available data, down from 4.8 per cent in September. New yuan lending in the first ten months of the year totalled 11.42 trillion yuan, compared with 14.97 trillion yuan in the same period of 2025, a fall of about 23.7 per cent.
Households drove much of the weakness. Household loans fell by 430 billion yuan in October, after being broadly unchanged in September, and have fallen by 1.46 trillion yuan over the first ten months of the year. Over the same period, household deposits rose by 8.47 trillion yuan, as families added to their savings while cutting back on borrowing. Corporate loans also fell, by 160 billion yuan, after rising by 1.29 trillion yuan the previous month.
The figures point to a longer adjustment in the property market and restrained domestic demand. Cheaper credit has not been enough to revive borrowing: new personal housing loans carried an average interest rate of about 3.1 per cent in October, broadly unchanged from a year earlier, while the rate on newly issued enterprise loans was about 2.9 per cent.
While bank lending shrank, broader financing kept growing, carried by bonds. Aggregate social financing, which captures funding through bank loans, bonds and share issuance, rose by about 1.15 trillion yuan in October. Government bond financing contributed 1.19 trillion yuan and corporate bonds 346.8 billion yuan. Total outstanding financing reached 469.16 trillion yuan, up 7.2 per cent from a year earlier.
Government bonds outstanding reached 106.41 trillion yuan at the end of October, up 14.4 per cent on the year, and now account for 22.7 per cent of all outstanding financing. Over the first ten months, bond and equity financing together made up 52.99 per cent of new aggregate financing, exceeding the share from loans by 13.87 percentage points.
Money growth also slowed. Broad money supply, known as M2, grew 7.1 per cent, its slowest pace in 19 months, while the narrower M1 measure accelerated to 4.4 per cent from 3.2 per cent, suggesting transaction balances were expanding more quickly even as lending stayed subdued.
The central bank reiterated during the release week that it would maintain moderately loose monetary policy and adjust its tools in a timely manner, without giving a date for another move. China had fully deployed its 800 billion yuan policy financing tool by 28 October, funding intended to support investment projects and create demand for related bank loans as spending gets under way.
Some parts of the economy are still borrowing faster than the average. Loans to services excluding real estate grew 9.2 per cent from a year earlier, almost twice the overall rate, while inclusive loans to small and micro businesses rose 6.9 per cent. But those categories remain a relatively small share of total lending, so their growth has not been enough to replace the momentum lost in more traditional areas.
Note: the figures in this article are from the People’s Bank of China’s October financial statistics as reported by Asia Daily, which is the single source for the data cited here.
Sources: People’s Bank of China, October financial statistics, as reported by Asia Daily — https://asiadaily.org/news/18775/
