New bank lending in China rose more than expected in September, rebounding sharply from a weak August as lenders accelerated issuance toward quarter end and policymakers stepped up targeted support. Banks extended 1.08 trillion yuan in new yuan loans in September, compared with 60 billion yuan in August, above the 975 billion yuan expected by analysts polled by Reuters and below the 1.29 trillion yuan lent a year earlier.
The stock figures were softer than the flow. Outstanding yuan loans rose 4.8 percent year on year, a record low, down from 4.9 percent in August and in line with expectations. Total new loans in the first nine months were 11.52 trillion yuan, down from 14.75 trillion yuan in the same period a year earlier, according to calculations from People’s Bank of China data published this week.
The pattern fits the September price data released the same morning. Producer prices are surging on imported costs while consumer inflation is 0.9 percent and household demand is subdued, so weak loan growth reads as a demand problem rather than a supply problem. Late September measures, including targeted rate cuts and mortgage subsidies, should modestly improve transmission, in Fitch’s assessment, but are unlikely to lift broader credit demand materially while the property sector stays weak.
For markets, the release keeps the easing bias intact without changing its scale. Investors now look to third quarter GDP for whether the economy is stabilising, and to whether October lending holds any of the September rebound once the quarter end effect fades.