China’s November Bank Loans Fall Short Amid Persistent Property Slump

Post by : Saif Nasser

China’s new bank loans in November grew slower than expected, reflecting a sharp slowdown in household borrowing amid a prolonged property sector slump. Policymakers have pledged more economic stimulus next year to revive growth.

Chinese banks issued 390 billion yuan ($55 billion) in new loans in November, up from 220 billion yuan in October. However, this was below the 500 billion yuan forecast by analysts and lower than the 580 billion yuan recorded a year earlier. Weak household borrowing, particularly for mortgages, was the main factor contributing to the slower loan growth. Some experts said the slowdown also reflects local government debt swaps, loan write-offs, and shifts toward other forms of financing, but weak mortgage demand remains a key drag on growth.

China’s housing market has faced difficulties since tighter regulations caused a liquidity crunch for developers in 2021. Many real estate companies have defaulted on debt, and home prices are expected to fall 3.7% this year, with declines projected to continue through 2026 before stabilizing in 2027. Household loans, including mortgages, fell by 206.3 billion yuan in November, following a 360 billion yuan contraction in October, while corporate loans increased to 610 billion yuan from 350 billion yuan, indicating that businesses are still borrowing despite economic uncertainty.

To support the economy, the Chinese government introduced a 500-billion-yuan policy-based financial program in September. By late October, the program had funded over 2,300 projects totaling around 7 trillion yuan. Despite these measures, consumers and businesses remain cautious about taking on additional debt because of ongoing property troubles and weak confidence. Chinese leaders have promised a “proactive” fiscal policy next year and plan to use monetary tools such as reserve requirement ratio cuts and interest rate adjustments to bolster economic growth, which analysts expect to target roughly 5%.

New yuan loans for the first 11 months of 2025 stood at 15.36 trillion yuan, lower than 17.1 trillion yuan a year earlier. Outstanding loans grew 6.4% in November compared to a year earlier, marking a record low and slightly down from October’s 6.5%. Meanwhile, broad M2 money supply increased 8% year-on-year in November, below expectations of 8.2%, and the narrower M1 money supply rose 4.9%, down from 6.2% in October. Total social financing, which measures overall credit and liquidity in the economy, rose 8.5% year-on-year, remaining unchanged from the previous month.

 

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