By Liz Lee
BEIJING, Feb 9 (Reuters) – New loans from Chinese banks in January probably rose from the prior month to match the strong performance a year ago, a Reuters poll showed on Monday, as a predictable monetary policy environment supported demand for credit.
Banks in China are expected to have issued around 5 trillion yuan ($721.17 billion) in net new yuan loans last month compared to 910 billion yuan in December, according to the average of 20 economists’ estimates in a Reuters poll.
Loan expectations in the survey were only slightly lower than the 5.13 trillion yuan issued in January 2025.
Factors supporting a strong start in lending this year were set to continue, Citi Research said in a note.
“The bills discount rate has been steady throughout January, which could hint at steady loan extension at the beginning of the year,” Citi analysts said.
A steady bill discount rate could signal stability in the economy and predictable monetary policy.
The People’s Bank of China is expected to release loans and money supply data between February 10 and 15.
‘MORE PROACTIVE’ POLICIES PLEDGED
Beijing has been driving a campaign to boost consumption to balance out the world’s second-largest economy’s reliance on exports and investments, as soft household spending, persistent deflation and a prolonged crisis in the property sector drag growth.
The government, which has pledged “more proactive” macroeconomic policies, will reveal its next five-year plan next month at the annual parliamentary session, along with the country’s growth target for this year.
Factory production activity readings have been mixed, with two highly followed surveys showing vastly different results.
The official survey showed China’s factory activity faltered in January, recording the slowdown for some types of manufacturers typical in this period in the face of weak domestic demand.
In contrast, a private-sector PMI likely to have surveyed a different profile of respondents showed that factory activity expanded at a faster pace last month, on the rebound in export orders and faster output growth ahead of the Lunar New Year holidays this month.
While the central bank has announced cuts to interest rates on some structural monetary policy tools with an indication of more to come, deflation will keep real lending rates elevated and mute loan demand, Capital Economics said in a research note last month.
“And with the government unlikely to widen its budget deficit target this year, the pace of government bond issuance is set to slow,” the research house’s China economist Zichun Huang said. “Taken together, we expect credit growth to weaken again in the coming months. Monetary policy will not be boosting the economy.”
China’s economic growth is expected to decelerate this year compared to the 5% rate in 2025, a Reuters poll in January showed, as policymakers are under pressure to address structural vulnerabilities and deploy additional measures to sustain long-term growth.
The broader M2 money supply probably grew 8.4% in January from a year earlier, slightly slower than the 8.5% in December, the polled estimate showed.
Outstanding yuan loans were estimated to have climbed 6.2% in January from a year before, slowing from 6.4% growth the previous month.
Total social financing (TSF) – a broad measure of credit and liquidity – probably rose to 7.05 trillion yuan in January from 2.21 trillion yuan in December, the poll showed. Any acceleration in government bond issuance could boost such financing.
The TSF measure includes off-balance-sheet forms of financing beyond conventional bank lending, such as initial public offerings, bond sales and loans from trust companies.
($1 = 6.9332 Chinese yuan renminbi)
(Reporting by Liz Lee; Additional reporting by Kevin Yao; Polling by Devayani Sathyan and Pranoy Krishna in Bengaluru and Jing Wang in Shanghai; Editing by Jamie Freed)
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