China New Yuan Loans Plunged in February

New yuan loans handed out by Chinese lenders plunged last month but beat expectations, slumping largely because banks front-loaded lending targets in January to boost market share.

Official data released Friday showed Chinese banks issued 900 billion yuan of new loans in February, equivalent to $131.02 billion, dropping from the prior month's 4.71 trillion yuan but topping the 860 billion yuan expected by economists polled by The Wall Street Journal.

Bank loan growth in China slowed for the 11th straight month to a record low 6% year-over-year increase, a deceleration mostly driven by the continued collapse in household borrowing, according to Capital Economics.

Total social financing, a broader metric that also includes nonbank financing, stood at 2.38 trillion yuan last month, nosediving from January's 7.22 trillion yuan. Meanwhile, M2, the broadest measure of money supply, rose 9% from a year earlier in February, matching the prior month's print and exceeding market expectations for an 8.9% increase.

With limited fiscal easing expected, CE economist Leah Fay says monetary easing will need to play a bigger role in supporting credit growth this year. But still, she says the Chinese central bank will likely stick to incremental easing.

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(END) Dow Jones Newswires

March 13, 2026 06:39 ET (10:39 GMT)