Aggregate financing to real economy up 7.4 percent
The People's Bank of China reported that outstanding aggregate financing to the real economy grew by 7.4 percent year on year to RMB462.06 trillion at the end of June 2026. Broad money supply (M2) increased by 8 percent over the same period.
Credit flows to the real economy
Outstanding aggregate financing to the real economy (AFRE) reached RMB462.06 trillion at end-June 2026, marking a 7.4 percent year-on-year increase.
RMB loans to the real economy, the largest component, rose 5.3 percent to RMB279.16 trillion, accounting for 60.4 percent of total AFRE.
Government bonds saw the most significant growth, increasing 14.2 percent year on year to RMB101.36 trillion, now representing 21.9 percent of AFRE.
Corporate bonds also expanded by 8.9 percent to RMB36.08 trillion.
In terms of new financing, AFRE increased by RMB20.84 trillion in the first half of 2026, a decrease of RMB2.02 trillion compared to the same period in 2025.
RMB loans contributed RMB10.76 trillion to this flow, while net financing of government bonds added RMB6.44 trillion.
This indicates a shift in financing structure, with government bonds playing a larger role in overall credit expansion.
Money supply and lending dynamics
China's broad money supply (M2) expanded by 8 percent year on year to RMB356.71 trillion at end-June, with narrow money supply (M1) growing 4 percent.
RMB deposits increased by RMB17.76 trillion in the first half of 2026, primarily from household and enterprise deposits.
New RMB loans totaled RMB10.72 trillion in H1, driven by enterprise and public institution lending.
Household loans, however, decreased by RMB366.8 billion, mainly in short-term loans.
Interbank RMB lending and pledged repo rates in June were 1.41 percent and 1.43 percent respectively.
Foreign exchange reserves stood at USD3.42 trillion.
Mixed signals for growth
China's financial data shows a complex outlook: aggregate financing grew robustly, but household loans contracted.
This suggests economic growth is still driven by corporate and government investment, not broad consumer demand.
Beijing's reliance on government bond financing signals ongoing efforts to stabilize the economy.
Source: Financial Statistics Report (H1 2026)
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