China's new bank loans shrink by 100 billion yuan in October, with loan growth at a record low
China's banks recorded a net fall of 100 billion yuan (about $15 billion) in new yuan loans in October, the People's Bank of China said on Friday — the third monthly contraction this year, after April and July, and below the growth economists had forecast. Outstanding yuan loans grew 4.7 percent from a year earlier, a record low, while broad money supply rose 7.1 percent. Total social financing, the widest measure of credit, added 1.15 trillion yuan in the month, helped by government bond issuance.
Key points
- New yuan loans fell by a net 100 billion yuan in October, the third monthly contraction this year, on the central bank's own data.
- Outstanding yuan loan growth slowed to 4.7 percent year on year, a record low, and M2 money supply rose 7.1 percent.
- Total social financing still added 1.15 trillion yuan in the month, with government bond issuance supporting the wider credit stock.
What happened
October is typically a weak month for new lending in China, after quarter-end lending drives the September figure and the national holiday shortens the working month. Even allowing for that, the contraction missed forecasts: economists polled by The Wall Street Journal had expected a small increase.
Reuters said the fall underscored weak credit demand, with households and businesses remaining cautious despite Beijing's efforts to spur borrowing and revive growth. The wider social-financing stock still grew, carried by government bonds rather than by bank loans to households and firms.
What we know / what we don't know yet
What we know
- That new yuan loans contracted by 100 billion yuan in October and outstanding loan growth hit a record-low 4.7 percent, on the central bank's own data.
- That total social financing added 1.15 trillion yuan in October, helped by government bond issuance.
What we don't know yet
- The split of October's fall between households and businesses — the reports read do not give the breakdown.
- Whether the central bank will answer with fresh stimulus — Friday's data release announced no new measure.
Claim by claim
Show all claims (3)
Why this label: The figures are the central bank's own data; Reuters calculated the monthly change from the bank's published totals, and Dow Jones reported the same contraction and the same poll forecast.
On the ladder: a claim earns Verified from primary evidence, or from two independent sources that do not copy each other.
Why this label: The record-low loan growth and the money-supply figures are the central bank's published data, reported by Dow Jones and in market summaries of the release.
On the ladder: a claim earns Verified from primary evidence, or from two independent sources that do not copy each other.
Why this label: Dow Jones reported the month's 1.15 trillion yuan increase from the central bank's data; the rise in the outstanding stock's growth rate, helped by government bond issuance, is reported in summaries of the same release.
On the ladder: a claim earns Verified from primary evidence, or from two independent sources that do not copy each other.
Why it matters
Bank lending is where China's stimulus has to bite: if households and companies will not borrow, rate cuts and lending targets do little. October's figures show the gap plainly — the state is borrowing through bonds while private credit demand shrinks to a record-low growth rate.
Update history
No silent edits. Every change is written here, with its time.
- Latest
Published — the October lending and money-supply figures are the central bank's own data, released on Friday.