China's aggregate financing growth slows to 7.8 percent

China's outstanding aggregate financing to the real economy (AFRE) grew 7.8 percent year on year to RMB456.89 trillion by end-April 2026. Broad money supply (M2) expanded 8.6 percent, while interbank lending rates saw a monthly decline.

Credit expansion moderates

Outstanding aggregate financing to the real economy (AFRE) reached RMB456.89 trillion at end-April 2026, marking a 7.8 percent year-on-year increase.

This growth reflects a moderation compared to previous periods.

RMB loans to the real economy, the largest component, stood at RMB276.9 trillion, up 5.6 percent year on year, while government bonds saw a robust 15.6 percent increase to RMB99.37 trillion.

Corporate bonds also grew by 8.3 percent to RMB35.52 trillion.

In terms of flow, AFRE increased by RMB15.45 trillion in the first four months of 2026, a decrease of RMB893.0 billion from the same period in 2025, indicating a slowdown in new financing.

Notably, RMB loans to the real economy increased by RMB8.5 trillion, RMB1.29 trillion less than the prior year, while net financing of corporate bonds rose by RMB739.3 billion year on year.

Money supply and deposit trends

Broad money supply (M2) reached RMB353.04 trillion at end-April, representing an 8.6 percent year-on-year rise.

Narrow money supply (M1) grew by 5 percent to RMB114.58 trillion, with currency in circulation (M0) increasing by 12.2 percent.

The first four months saw a net money injection of RMB653.0 billion.

Total RMB and foreign currency deposits stood at RMB350.57 trillion, up 9 percent year on year, with RMB deposits increasing by RMB14 trillion in the first four months.

Household deposits rose by RMB5.74 trillion, and non-financial enterprise deposits by RMB1.43 trillion.

Outstanding RMB loans totaled RMB280.5 trillion, growing 5.6 percent year on year, with new RMB loans reaching RMB8.59 trillion in the first four months.

Loans to enterprises and public institutions grew by RMB8.99 trillion, offsetting a decrease in household loans by RMB490.2 billion.

Mixed signals for economic momentum

The slowdown in aggregate financing growth and the year-on-year decline in AFRE flow suggest a more cautious approach to credit expansion, potentially reflecting efforts to manage debt levels.

However, the sustained growth in M2 and significant government bond issuance indicate continued policy support aimed at stabilizing economic activity.

The detailed breakdown reveals a complex picture, with strong enterprise lending contrasting with a contraction in household loans, highlighting ongoing structural adjustments within the economy.