Net new yuan loans fell by 340 billion yuan, or approximately $50.4 billion, in July 2026, the sharpest monthly contraction ever recorded. This decline marks only the third instance since 2000, following July 2005 and once in 2025. Household loans contracted by 460.3 billion yuan and corporate loans by 130 billion yuan. Total new loans from January through July 2026 amounted to 10.38 trillion yuan, leaving a gap of roughly 2.5 trillion yuan compared to the same period last year. Outstanding yuan loans grew just 5.1% year-on-year in July, a record low. The People’s Bank of China acknowledged the weakness and pledged to implement practical, effective measures.
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