New bank loans in China reached an all-time high in January, totaling 5.13 trillion yuan ($706.40 billion), according to data from the People's Bank of China. This figure significantly surpassed analysts' forecasts of 4.5 trillion yuan and more than quadrupled the lending volume from December.
The surge in lending reflects the central bank's efforts to bolster China's economic recovery, which has been uneven. The People's Bank of China has pledged to adjust its monetary policy to support growth, potentially utilizing interest rates and reserve requirement ratio adjustments.
Despite the increase in January, new bank lending for the entire year of 2024 totaled 18.09 trillion yuan, a decrease from 22.75 trillion yuan in 2023. Broad M2 money supply grew by 7.0% year-on-year in January, falling short of the 7.2% forecast. Outstanding yuan loans increased by 7.5% year-on-year, down from 7.6% in December.
China faces external economic pressures, including trade tensions with the United States. The Chinese government has announced tariffs on some U.S. imports in response to tariffs imposed by the U.S. The central bank has implemented measures such as interest rate cuts and debt relief packages to stimulate the economy.