China’s Loan Growth Falls to Weakest Level in Decades

China’s credit slowdown is becoming increasingly severe.
Loans grew just 4.9% year over year in August, the weakest reading in data going back to the 1990s.
New bank lending came in at only around $9 billion, far below expectations of roughly $60 billion.
Aggregate financing, a broader measure of credit across the economy, increased by about $247 billion versus roughly $314 billion expected.
The weakness reflects soft borrowing demand from both households and businesses.
Household medium- and long-term loans have contracted in five months this year, while comparable corporate lending has fallen to less than half of its 2023 levels.
The contrast with previous cycles is striking.
Chinese loan growth reached roughly 34.2% year over year following the 2008 Financial Crisis, but has been trending steadily lower for years.
Weak credit demand suggests households and companies remain cautious about taking on new debt, creating another headwind for investment, consumption and broader economic growth.
The key question is whether policy support can revive private-sector borrowing or whether China is entering a prolonged period of structurally weaker credit growth.