Key facts
- China's new yuan loans contracted by 340 billion yuan in July.
- This is the second loan contraction in 2026, following April.
- Analysts had expected 45 billion yuan in new loans for July.
- Household loans, including mortgages, shrank by 460.3 billion yuan.
- Outstanding yuan loans grew 5.1% year-on-year, a record low.
- M2 money supply growth slowed to 7.7% in July.
China's new bank loans unexpectedly contracted in July, falling by 340 billion yuan and missing analyst expectations for an increase. This marks the second contraction this year, underscoring weak borrowing demand from both households and businesses. Household loans, including mortgages, shrank by 460.3 billion yuan, while corporate loans also saw a contraction. Outstanding yuan loans grew at a record low of 5.1% year-on-year, and M2 money supply growth slowed to 7.7%. The People's Bank of China has indicated it will maintain an accommodative monetary stance and implement measures as needed to support growth.