China Credit Growth Lags Forecast Even as M2 Accelerates

China’s credit expansion remained softer than expected through July, according to data released by the People’s Bank of China. Aggregate social financing in the first seven months of 2025 reached CNY23.99 trillion, missing economists’ consensus of CNY24.46 trillion. New yuan loans over the same period totaled CNY12.87 trillion, also below the projected CNY13.22 trillion. The central bank said outstanding aggregate financing stood at CNY431.26 trillion at the end of July. Despite sluggish credit demand, broad money supply (M2) accelerated, rising 8.8% from a year earlier and topping the 8.3% forecast, while narrower measures of money supply also picked up. The weaker-than-forecast lending figures underscore persistent caution among households and businesses even after earlier policy easing, adding to expectations that Beijing may consider additional steps to bolster financing conditions in the months ahead.