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Karen Tian

China’s April lending data points to persistently weak borrowing demand among households and businesses, despite a relatively loose monetary policy and strong industrial activity and profits.
Banks extended a total of 8.59 trillion yuan (US$1.26 trillion) in new yuan loans in the first four months of this year, with lending barely rising in April, according to data released by the People’s Bank of China (PBOC) on Thursday.
The rare monthly fall in April – only the second in the past decade – comes as household and corporate appetite for debt remains at historic lows.
Data released by the Beijing-based think tank National Institution for Finance and Development (NIFD) showed household debt contracted 0.4 per cent year on year in the first three months of this year. That marked the first negative growth since the third quarter of 1995, it said.
Corporate debt grew by only 7.8 per cent, also near a record low.
Total social financing – a broad gauge of financing demand that also includes bond and equity financing – reached 15.45 trillion yuan from January to April, 893 billion yuan less than the same period a year ago. The April figure stood at 620.7 billion yuan.
In its first-quarter monetary policy report released earlier this week, the PBOC said financing conditions remained “relatively accommodative”, citing stronger lending growth in the technology and green sectors.
Outstanding M2 – a broad measure of money supply and overall market liquidity – grew 8.6 per cent from a year earlier by the end of April, compared with 8.5 per cent a month earlier.
The latest figures come after China reported first-quarter economic growth of 5 per cent, while industrial profits rose 15.8 per cent in March from a year earlier, buoyed by rising factory-gate prices amid the Iran war energy shock.
Morgan Stanley said in a report on Wednesday that broad credit growth was expected to slow as “domestic consumption lags amid a soft labour market”, though it added that a structural “supercycle” was emerging driven by rising investment in AI and energy.
The Wall Street investment bank also upgraded its economic forecast for China to 4.8 per cent.


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Lending growth slows as borrowing demand from households and businesses remains weak


Lending growth slows as borrowing demand from households and businesses remains weak.


China’s credit demand weak in April despite policy support and strong industrial profits

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Lending growth slows as borrowing demand from households and businesses remains weak

Lending growth slows as borrowing demand from households and businesses remains weak