đŸ’„ China’s Credit Crisis Deepens 📉

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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.

đŸ”č 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

đŸ”č 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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