- China 2025 new yuan loans 16.27 trln yuan, lowest since 2018
- Dec new yuan loans beat f'cast
- PBOC announces targeted monetary policy easing
BEIJING, Jan 15 (Reuters) - China's new bank loans totalled 16.27 trillion yuan ($2.33 trillion) in 2025, the lowest since 2018, highlighting weak borrowing needs as a prolonged property downturn and tepid demand suppressed business and household appetite for credit.
Policymakers in the world's second-biggest economy have struggled to counteract a housing market slump and spur household consumption. At the same time, China saw a record trade surplus of nearly $1.2 trillion in 2025.
Total new yuan loans in 2025 were much lower than the 18.09 trillion yuan in 2024, the People's Bank of China (PBOC) data showed on Thursday.
"New credit in 2025 was relatively weak for the year as a whole," said Li Miaoxian, chief macro economic researcher at Jiangnan Rural Commercial Bank.
"From the asset side, amid the property market adjustment, the private sector including households and firms showed insufficient willingness to add leverage, while government bond issuance was ramped up to stabilise leverage and the economy."
Zhaopeng Xing, senior China strategist at ANZ said "the policy response remains relatively slow at present", adding the likelihood of a reserve requirement ratio (RRR) cut before the Lunar New Year has dropped significantly though cannot be ruled out.
YEAR-END IMPROVEMENT
Government stimulus measures appeared to gradually improve credit demand at year-end, as new bank loans in December rose quicker than expected.
Banks extended 910 billion yuan in new loans last month, up from 390 billion yuan in November and beating expectations, according to Reuters calculations based on PBOC data.
The figure was above the 800 billion yuan expected by 19 analysts polled by Reuters but lower than the 990 billion recorded in December 2024.
Household loans, including mortgages, shrank by 91.6 billion yuan in December after a contraction of 206.3 billion yuan in November, while corporate loans grew by 1.07 trillion yuan, according to Reuters calculations.
The economy could be seeing the early benefits of a 500-billion-yuan policy-based financial tool that Beijing introduced in September last year to supplement project capital.
Outstanding yuan loans grew 6.4% in December from a year earlier, the same pace as November, central bank data showed. Analysts had expected 6.3% growth.
Broad M2 money supply grew 8.5% from a year earlier in December, quicker than analysts' 8% forecast and November's 8%.
Outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, rose 8.3% from a year earlier in December, down from 8.5% a month earlier.
PBOC HAS ROOM TO CUT RRR, INTEREST RATES
A Reuters poll showed on Thursday that China's economy is likely to have grown 4.9% in 2025 and expansion may slow to 4.5% in 2026, piling pressure on the government for more stimulus.
"A good level of stimulus is still needed when China navigates its structural transformation and U.S. policy shocks could happen at any time," said Tianchen Xu, senior economist at the Economist Intelligence Unit.
China has pledged to stabilise its housing market and boost domestic demand to revive economic growth, stepping up investments in major national projects and extending its consumer trade-in scheme this year.
To boost the economy, the PBOC said on Thursday that the bank will lower the interest rate on some structural monetary policy tools by 25 basis points, effective from January 19.
"There is still some room for cutting RRR and interest rates this year," PBOC deputy governor Zou Lan told a press conference in Beijing on Thursday.
($1 = 6.9708 Chinese yuan)
Reporting by Kevin Yao, Ellen Zhang; Additional reporting by Shi Bu and Liangping Gao; Editing by Jacqueline Wong, Alexandra Hudson
Source: Reuters