China’s New Bank Loans Shrink by 100 Billion Yuan in October, the Third Drop This Year

Featured image: The People’s Bank of China headquarters on Financial Street in Beijing, in an October 2025 file photo. Photo: Boubloub, Wikimedia Commons, CC0 1.0. Cropped to 16:9.

China bank loans shrank in October for the third time this year. New yuan loans fell by 100 billion yuan, about $15 billion, according to Reuters calculations from People’s Bank of China data released Friday, Nov. 13, 2026. Analysts had expected a 20 billion yuan increase.

A year earlier, new loans rose by 220 billion yuan, Reuters reported.

October monthly loan totals are Reuters calculations from PBOC cumulative figures. The 11.42 trillion yuan year-to-date total, the 4.7% loan-growth rate and the 7.1% M2 rate are from the central bank’s October report, as reported by Reuters and official Chinese outlets.

October lending contracted, and not only because the month is often weak

The central bank does not publish a month-by-month breakdown. Reuters calculated the October figures by subtracting the January–September totals from the January–October totals in Friday’s release. Loans also declined in April and July, Reuters said, making October the third monthly contraction of 2026.

October is typically a soft month for new credit. It follows a quarter-end lending push, and a week-long national holiday cuts the number of working days. That seasonal pattern does not, on its own, explain a drop this large relative to last year or to the Reuters poll. By The Boston Report’s calculation from the Reuters figures, October 2026 was 320 billion yuan lower than October 2025 and 120 billion yuan below the 20 billion yuan increase analysts had expected.

Household loans, including mortgages, fell by 430 billion yuan in October after being flat in September, Reuters calculated. Corporate loans contracted by 160 billion yuan, after rising 1.29 trillion yuan in September. Those two components sum to a 590 billion yuan decline, which is larger than the 100 billion yuan drop in total new yuan loans. The difference implies that other loan categories rose enough to offset part of the household and corporate contractions. Reuters did not publish a residual line, and this article does not invent one. Zhaopeng Xing, a senior China strategist at ANZ, said medium- and long-term household and corporate loans turned to net repayments and that credit growth remained weak.

The same report sits in a longer policy shift. In early November, the PBOC made the overnight reverse-repo rate its main policy anchor at 1.25%. In early November it also cut the rate on a stock-buyback relending facility to 1%, as banks sought about 200 billion yuan in quotas. Those are changes in how the central bank prices short-term funds and a targeted lending tool. They are not the same as a rebound in household and corporate borrowing, which Friday’s totals did not show.

By the numbers: year-to-date lending is 24% lower

The PBOC’s October financial statistics report said new yuan loans totaled 11.42 trillion yuan in the first 10 months of 2026. Reuters said the comparable total a year earlier was 14.97 trillion yuan. By The Boston Report’s calculation, that is a decline of 3.55 trillion yuan, or 23.7%. China News Service and People’s Daily, both Chinese state media, carried the 11.42 trillion yuan official total and the 4.7% outstanding-loan growth rate from the same report. ✓Claim by China News Service (Chinese state media); confirmed by Reuters ✓Claim by People's Daily (Chinese state media); confirmed by Reuters

Outstanding yuan loans stood at 283.33 trillion yuan at the end of October and were up 4.7% from a year earlier, according to the PBOC report as carried by China News Service. Reuters said that 4.7% pace was a record low, down from 4.8% in September, and that analysts had forecast a 4.8% gain. The 0.1 percentage-point slowing is small. A record-low growth rate after a month of net repayment is not.

Other official aggregates moved in mixed directions. Broad money, M2, grew 7.1% year on year, the slowest pace in 19 months and below a Reuters poll forecast of 7.2%, after 7.2% in September, Reuters reported. The narrower M1 measure accelerated, to 4.4% from 3.2% in September. Outstanding total social financing, a broader credit and liquidity measure, rose 7.2% year on year, up from 7.1% in September. Zhou Hao, chief economist at Guotai Junan International, told Reuters that aggregate financing still relies mainly on bond issuance, which he described as a normal shift toward direct financing. China announced in late October the full deployment of an 800-billion-yuan policy financing tool, which analysts said could later support long-term corporate loans and entrusted loans in total social financing.

The official year-to-date departmental breakdown, as carried by China News Service from the PBOC report, shows the household side already shrinking over the first 10 months: household loans fell 1.46 trillion yuan, including a 1.41 trillion yuan drop in short-term loans and a 50.1 billion yuan drop in medium- and long-term loans. Loans to enterprises and public institutions rose 12.39 trillion yuan. Loans to non-bank financial institutions fell 239.5 billion yuan. Those official cumulative lines describe the first 10 months, not October alone.

The central bank says policy will stay loose

In its third-quarter monetary policy implementation report, released on Wednesday, Nov. 11, the PBOC said it would step up counter-cyclical adjustments, expand domestic demand and optimize supply in order to strive for the year’s economic development goals, Reuters reported. The bank said the economy faces a mismatch between strong supply and weak demand, structural imbalances and external shocks, and that the external environment has become more complex and volatile. It said it would continue an “appropriately loose” monetary policy, adjust tools in a timely manner, keep overall borrowing costs low, and keep the yuan’s exchange rate basically stable at a reasonable and balanced level. It also said it would strengthen support for domestic demand, scientific and technological innovation and infrastructure, and that it would enrich its toolkit and safeguard the stock, bond and foreign exchange markets.

Policymakers introduced targeted credit support in late September, Reuters reported, but those measures have yet to shore up business investment and household spending. Xing, the ANZ strategist, said China’s full-year growth is now set to exceed 4.5% and that the central bank’s priority remains exchange-rate stability, making fresh policy measures unlikely in the near term. That is his assessment, not a PBOC forecast. China’s 2026 growth target is between 4.5% and 5.0%. Reuters reported that the target appears within reach after the economy expanded faster than expected in the third quarter, with robust exports helping offset a prolonged property downturn and soft domestic demand. Those export totals are the same backdrop as China’s goods surplus passing $1 trillion in October.

What the figures show, and what they do not

The October data show net repayment in new yuan loans, a record-low pace of outstanding loan growth, and a year-to-date lending total almost a quarter below the same period of 2025, by The Boston Report’s calculation. They also show a slight pickup in the year-on-year rate of total social financing and a faster M1 reading, which are not the same as a revival in household and corporate bank borrowing. The PBOC’s Wednesday report restated an accommodative stance. Friday’s totals are the first monthly credit reading after that report, and they do not yet show that stance producing broader loan demand.

Two limits on the data are worth keeping in view. First, the October monthly figures used here are Reuters calculations from official cumulative totals, not a line the PBOC itself labeled as a monthly release. Second, a weak October after a holiday week is a familiar seasonal pattern; the more useful comparisons are with October 2025, with the Reuters poll, and with the 11.42 trillion versus 14.97 trillion year-to-date totals. Those comparisons, not the seasonal caveat alone, are why the contraction is the news.

Sources

• Reuters, via The Standard: “China’s October new bank loans shrink for the third time this year as credit demand weakens,” Nov. 13, 2026
• Reuters, via Business Recorder: “China’s central bank vows to step up policy support for economy,” Nov. 15, 2026 (third-quarter monetary policy report and October loan figures)
• China News Service: PBOC October 2026 financial statistics report, Nov. 13, 2026
• People’s Daily Overseas Edition, via people.com.cn: “New yuan loans rose 11.42 trillion yuan in the first 10 months,” Nov. 14, 2026
• Caixin: October social financing and yuan-loan figures, Nov. 13, 2026