💥 China’s Credit Crisis Deepens 📉
New bank loans in China fell by 1.83 trillion yuan (-10%) in 2025, dropping to 16.27 trillion yuan, the lowest level since 2018. This marks the second consecutive annual decline, signaling a worsening credit slowdown.
🔹 What’s Driving the Weakness
• Sluggish borrower demand – Consumers and businesses remain cautious
• Low confidence – Weak consumer sentiment limits borrowing
• Declining business investment – Firms are hesitant to take on new debt
• Extended slowdown – China’s credit contraction has been ongoing since early 2023
🔹 Why This Matters
• The economy is showing deflationary pressures, raising fears of a deeper slowdown
• Investors may face heightened risk from shrinking domestic credit markets
• Some analysts are warning this could be China’s “2008 moment”, echoing global financial stress
⚠️ Big Picture: China’s credit contraction underscores the fragility of growth, and markets are watching closely for policy responses to stabilize lending and investment.
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