Chinese banks reportedly supplied more than 2 trillion yuan in new loans last month. This is more than three times the previous month and exceeded market expectations, achieving a surprising rebound. It is analyzed that credit demand has recovered as a result of the Chinese government's economic stimulus measures and the U.S.-China tariff truce.
According to the financial statistics report released by the People's Bank of China on the 14th, new loans in June amounted to 2.24 trillion yuan (approximately 431.67 trillion won). This represents a 261% increase within a month, significantly surpassing the Reuters estimate of 1.8 trillion yuan (approximately 346.89 trillion won).
According to an analysis of the People's Bank of China data by Reuters, household loans in June totaled 597.6 billion yuan (approximately 115.17 trillion won), a 1006% increase compared to May (54 billion yuan, approximately 10.41 trillion won). Corporate loans increased to 1.77 trillion yuan, a rise of 233% compared to the previous month (530 billion yuan).
As of the end of June, the outstanding balance of yuan loans increased by 7.1% compared to the same period last year. This is the same as May and slightly higher than the market expectation of 7.0%. M2 increased by 8.3% year-on-year and M1 rose by 4.6%, widening the increase compared to the previous month. The annual growth rate of the total social financing (TSF), an indicator showing the overall flow of funds into the real economy, slightly rose from 8.7% in May to 8.9%.
Earlier, the Chinese government implemented extensive economic stimulus measures in response to the U.S. 'tariff bomb.' Subsequently, the tariff war between the two countries entered a 90-day truce, and in June, the second negotiations were held in the United Kingdom, temporarily easing pressures on the Chinese economy.
However, ongoing issues such as prolonged real estate market recession, sluggish domestic demand, and overproduction continue to threaten the Chinese economy. As a result, the Chinese government is under pressure for additional economic stimulus measures. Reuters noted that 'the recent U.S. decision to implement new tariff measures has also intensified this pressure.'
It was further stated that 'the People's Bank of China reaffirmed its policy of maintaining an accommodative monetary policy last month and would guide financial institutions to expand credit supply and reduce the overall funding costs for society.' However, some analysts are concerned that the pace of monetary easing may be gradual due to worries about worsening industrial overproduction.