China's credit structure continued to improve in the second quarter of 2026, with financial support for science and technology sectors expanding significantly while real estate loans extended their net reduction, according to official monetary policy data.
Q2 Credit Highlights
Loans to enterprises and public institutions, science and technology innovation sectors, inclusive small and micro enterprises, and green sectors all recorded growth in Q2, while real estate lending continued to post net reductions, reflecting the ongoing reallocation of credit resources toward productive sectors of the real economy.
This structural shift aligns with Beijing's stated policy goal of channeling more capital toward the "new quality productive forces" - strategic emerging industries including artificial intelligence, semiconductors, clean energy, and advanced manufacturing.
Policy Directions
The PBOC's H2 2026 work conference, held on August 1, reiterated the commitment to maintaining a moderately loose monetary policy stance while improving the transmission mechanism of monetary policy to better serve the real economy. Governor Pan Gongsheng said the central bank will make comprehensive use of all monetary policy tools, including reverse repos, medium-term lending facilities, and treasury bond operations, to provide liquidity across all time horizons.
Outlook
Economists expect credit growth to remain supportive of economic recovery while the quality of credit allocation continues to improve. The narrowing of property sector loans in the aggregate credit balance is seen as a structural feature of China's economic transition rather than a constraint on overall credit availability.