China’s May Bank Lending Misses Forecasts Again

Chinese banks issued 620 billion yuan ($86.34 billion) in new loans in May 2025, a rebound from April but well below market expectations of 850 billion yuan and last May's 950 billion yuan. The rebound was partly due to seasonal trends, though overall credit demand remains weak amid ongoing U.S. trade tensions and a prolonged property slump. Despite a temporary 90-day trade truce and the People's Bank of China's monetary easing efforts, household and corporate borrowing stayed subdued, with outstanding loan growth slowing to its lowest rate since at least 1998. Broader credit, measured by total social financing, rose to 2.29 trillion yuan, mostly driven by government borrowing. The M2 money supply growth slowed to 7.9%, missing forecasts, highlighting persistent caution among consumers and businesses. Analysts note that Beijing's stimulus measures may take time to show effects as economic challenges continue.