China Banks Balance Sheet

Chinese banks extended CNY 900 billion in new yuan loans in August 2024, above a fifteen-year low of CNY 260 billion in July, but below forecasts of CNY 1020 billion. It is also the lowest value for an August month since 2015, in a sign the Chinese economy remains subdued. Meanwhile, outstanding loan growth eased to 8.5% from 8.7% in July, a record low reading and below forecasts of 8.6%. Total social financing on the other hand, rose to CNY 3030 billion, a five-month high, compared to CNY 770 billion in July and forecasts of CNY 2950 billion. Still, it is below CNY 31279 billion a year earlier. Considering the first eight months of the year, new yuan loans totaled CNY 14.43 trillion. Chinese credit aggregates have been slowing despite surprise rate cuts by the PBoC in an attempt to stimulate the weakening Chinese demand. Lower credit appetite also reflected the impact of authorities’ crackdown on arbitrage by firms and shadow banks.