China’s New Bank Loans Shrink in July as Borrowing Demand Stays Weak

What happened

In the first seven months of 2026, new yuan loans totaled 10.38 trillion yuan, down nearly 20% from a year earlier. In July, new bank loans contracted by 340 billion yuan ($50.4 billion), far below the expected 126 billion yuan increase. Household loans shrank by 460 billion yuan and corporate loans fell by 130 billion yuan.

Why it matters

The contraction highlights weak borrowing demand even as a surge in government bond issuance supports broader credit growth.