đ In October, banks took back more money than they lent out
Octoberâs credit data was negative.
New yuan loans fell by a net 100 billion yuan. In September, they rose by 1.08 trillion yuan. The Wall Street Journalâs survey expected an increase of 10 billion yuan; Reutersâ survey expected 20 billion yuan. The actual figure dropped into negative territory. It was the third monthly net decline this year.
Breaking it down, household loans fell by 430 billion yuan and corporate loans by 160 billion yuan, according to Reutersâ calculations based on central bank data. In the first ten months, household loans fell by a cumulative 1.46 trillion yuan, with short-term loans down 1.41 trillion yuan. Corporate loans were still up 12.39 trillion yuan over the first ten months, with medium- and long-term loans accounting for 6.69 trillion yuan. The only ones still adding leverage are the government and local government financing platforms.
The outstanding loan balance was 283.33 trillion yuan, up 4.7% year on year. Reuters said that was the slowest growth on record.
Total social financing increased by 1.15 trillion yuan in October, versus expectations of 1.42 trillion yuanâa 19% miss. In September, it was 3.55 trillion yuan. The cumulative total for the first ten months was 28.61 trillion yuan, 2.29 trillion yuan less than in the same period last year. The outstanding balance was 469.16 trillion yuan, up 7.2% year on year.
Thereâs no shortage of money. M2 stood at 359.06 trillion yuan, up 7.1% year on yearâthe lowest growth rate since March 2025. M1 grew 4.4%, 1.2 percentage points faster than in September. The gap between the two narrowed from 4.0% to 2.7%. M0 grew 10.7%; cash is still flowing out.
Put plainly: money moved from time deposits to demand deposits, but demand deposits didnât turn into loans. Loose money, tight credit.
In a report that day, Xinhua quoted an associate professor at Tsinghua Universityâs PBC School of Finance as saying that M2 and total social financing growth were at reasonable levels. Loans are negative; the adjective is âreasonable.â
Banks canât make loans, so on the asset side they have to buy bonds.
Meanwhile, things are tightening overseas. A December Fed rate hike is all but locked in; the debate has already shifted to January. The U.S. Dollar Index closed Friday at 103.41. The 10-year Treasury yield was 5.15%. Gold fell 5.5% for the week, dropping to $3,886âits lowest level in thirteen months. Even safe-haven money is shifting into dollars.
BTC at $64,700, based on six price sources, down 3% over 24 hours. Thatâs 49% below last Octoberâs $126,080.
Deleveraging happens at two different speeds on-chain and in the banking system. Banks use rollovers and restructuring to spread losses over the next few years. On-chain, once prices hit the mark, liquidations happen immediately. Thereâs no time.
Without a recovery in credit, buyers wonât just appear on their own. The halving wonât help. ETFs wonât help either.
#äžæŹèȘćœé 瀟ćșBaoluoćžćè”æŹ #ćźè§ç»æ” #ChinaCredit
Octoberâs credit data was negative.
New yuan loans fell by a net 100 billion yuan. In September, they rose by 1.08 trillion yuan. The Wall Street Journalâs survey expected an increase of 10 billion yuan; Reutersâ survey expected 20 billion yuan. The actual figure dropped into negative territory. It was the third monthly net decline this year.
Breaking it down, household loans fell by 430 billion yuan and corporate loans by 160 billion yuan, according to Reutersâ calculations based on central bank data. In the first ten months, household loans fell by a cumulative 1.46 trillion yuan, with short-term loans down 1.41 trillion yuan. Corporate loans were still up 12.39 trillion yuan over the first ten months, with medium- and long-term loans accounting for 6.69 trillion yuan. The only ones still adding leverage are the government and local government financing platforms.
The outstanding loan balance was 283.33 trillion yuan, up 4.7% year on year. Reuters said that was the slowest growth on record.
Total social financing increased by 1.15 trillion yuan in October, versus expectations of 1.42 trillion yuanâa 19% miss. In September, it was 3.55 trillion yuan. The cumulative total for the first ten months was 28.61 trillion yuan, 2.29 trillion yuan less than in the same period last year. The outstanding balance was 469.16 trillion yuan, up 7.2% year on year.
Thereâs no shortage of money. M2 stood at 359.06 trillion yuan, up 7.1% year on yearâthe lowest growth rate since March 2025. M1 grew 4.4%, 1.2 percentage points faster than in September. The gap between the two narrowed from 4.0% to 2.7%. M0 grew 10.7%; cash is still flowing out.
Put plainly: money moved from time deposits to demand deposits, but demand deposits didnât turn into loans. Loose money, tight credit.
In a report that day, Xinhua quoted an associate professor at Tsinghua Universityâs PBC School of Finance as saying that M2 and total social financing growth were at reasonable levels. Loans are negative; the adjective is âreasonable.â
Banks canât make loans, so on the asset side they have to buy bonds.
Meanwhile, things are tightening overseas. A December Fed rate hike is all but locked in; the debate has already shifted to January. The U.S. Dollar Index closed Friday at 103.41. The 10-year Treasury yield was 5.15%. Gold fell 5.5% for the week, dropping to $3,886âits lowest level in thirteen months. Even safe-haven money is shifting into dollars.
BTC at $64,700, based on six price sources, down 3% over 24 hours. Thatâs 49% below last Octoberâs $126,080.
Deleveraging happens at two different speeds on-chain and in the banking system. Banks use rollovers and restructuring to spread losses over the next few years. On-chain, once prices hit the mark, liquidations happen immediately. Thereâs no time.
Without a recovery in credit, buyers wonât just appear on their own. The halving wonât help. ETFs wonât help either.
#äžæŹèȘćœé 瀟ćșBaoluoćžćè”æŹ #ćźè§ç»æ” #ChinaCredit
