The People's Bank of China released its July 2026 financial data on August 13, showing that broad money supply (M2) reached 303.31 trillion yuan, representing year-on-year growth of 6.3% — a figure that fell slightly below market expectations and continued the moderation trend observed since late 2025.
Loan and Credit Growth
In the first seven months of 2026, newly added RMB loans totaled 13.53 trillion yuan, maintaining a broadly stable pace of growth and demonstrating continued financial support for the real economy. The cumulative social financing scale increment reached 18.87 trillion yuan over the same period, down 3.22 trillion yuan compared to the same period last year, reflecting ongoing "water-squeezing" effects from regulatory cleanup of capital misallocation.
For July alone, new RMB loans came in at 770.8 billion yuan. Analysts noted that July is traditionally a "weak credit month" due to seasonal patterns — over the past decade, median July new loan issuance has been 58% below June levels as banks front-load lending in the quarter-end冲刺 period. Even accounting for this seasonality, credit demand remains relatively soft.
M1 Continues to Decline
Slender money supply (M1) — a gauge of corporate liquidity and real economy activity — continued its downward trend, reflecting cautious business sentiment and ongoing adjustment in real estate and local government financing. The M1 contraction underscores the structural transition underway in China's economy, as traditional credit growth drivers gradually yield to new动能 sectors.
Policy Implications
Despite the softer-than-expected headline numbers, analysts emphasized that total financial aggregate growth still exceeds nominal GDP growth, indicating ample policy support remains in place. Looking ahead, the policy emphasis is expected to shift further toward benefiting households and boosting consumption, creating new effective financing demand through demand-side stimulus rather than supply-side credit expansion alone.