(Bloomberg) -- China's credit expansion held up better than expected in July, but weak borrowing demand among households and businesses pushed loans into a worse-than-forecast contraction. Selena Gomez Accused of Fraud by Mental-Health Startup Investors Costliest US Bond Sale Since 2001 Is Investor Warning to Bessent Anthropic in Talks to Buy AI Startup Decart for $6 Billion Walter Sells Lakers, Seeks More Cash to Pay Loans Amid DOJ Probe Phoebe Gates Knew Phia Shopping App Took Credit for Sales It Didn't Drive Aggregate financing, a broad measure of credit, increased 1.4 trillion yuan ($209 billion), according to Bloomberg calculations based on data released by the People's Bank of China on Friday. That compares with a median forecast of 1 trillion yuan by economists in a Bloomberg survey and an expansion of 1.1 trillion yuan recorded a year ago Financial institutions recorded a contraction of 340 billion yuan in new yuan loans in the month, reflecting net repayment of debt.
The median forecast was for a drop by 100 billion yuan The new loans gauge has only contracted twice in the past two decades prior to the latest release. Credit activity tends to fall sharply in July as banks typically ramp up lending at the end of the second quarter. Economists expect underlying demand to remain weak even after accounting for seasonal effects.
China has suffered from sluggish lending growth for several years now, with its once-powerful credit cycle that used to move global markets no longer a factor. The central bank has said that's in part due to the economy's transition away from property-fueled growth toward tech sectors that rely less on loans. Bond financing recently overtook loans in the mix of new credit for the first time, driven by surging sales of government debt.
Government bond sales of around 1.2 trillion yuan last month likely remained the most important driver of financing, Citigroup Inc. economists said in a report before the data release. AI Music Startup Suno Bets Anyone Can Be a Rock Star The Midwest City Keeping the American Dream Alive for First-Time Homebuyers The Steamy, Magical and Now Very Lucrative Romantasy Business With EV Sales Slowing, Hybrid Cars Are Hot Again
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