China’s May Bank Lending Beats Forecasts as Corporate Credit Rebounds
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China’s new bank loans returned to positive growth in May, beating market expectations, as a surge in corporate bill financing offset persistent weakness in household borrowing.
Aggregate financing and new yuan loans both exceeded average forecasts after an unexpected slump in April, according to data released Friday by the People’s Bank of China. New yuan loans totaled about 520 billion yuan ($76.5 billion), while total social financing, a broad measure of credit and liquidity in the economy, expanded by 2 trillion yuan in May.
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- New yuan loans hit 520 billion yuan in May, beating expectations, driven by nearly 560 billion yuan in corporate bill financing.
- Household credit continued to contract, with net loan repayments of 141.1 billion yuan, reflecting weak property market and deleveraging.
- Government bond issuance dominated aggregate financing at 1.2 trillion yuan, while M2 grew 8.6% and M1 rose to 5.5% year-on-year.
- First quarter of 2026：
- Household leverage ratio stood at 59%, down from 62.3% in the first quarter of 2024.
- April 2026：
- New yuan loans and aggregate financing experienced an unexpected slump.
- May 2026：
- New bank loans returned to positive growth, totaling about 520 billion yuan, driven by a surge in corporate bill financing. Aggregate financing expanded by 2 trillion yuan. Corporate borrowing rose to about 640 billion yuan, while household credit continued to contract with net loan repayments of 141.1 billion yuan. Government bond issuance dominated aggregate financing at 1.2 trillion yuan. M2 grew 8.6% year-on-year, and M1 rose 5.5%.
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