As trade tensions resurface and tariff proposals gain traction in U.S. politics, China is responding with a domestic policy pivot focused on targeted credit growth.
In the first quarter of 2025, Chinese banks issued 9.78 trillion yuan in new loans—around $1.36 trillion. While the total is historically high, the more important story is in the composition of the lending. New credit is being directed into core sectors of the real economy: lending to small and micro enterprises rose 12.2% year-on-year; long-term loans to the manufacturing sector increased by 9.3%; and consumer credit—particularly in housing—is gaining momentum. Interest rates remain near record lows, helping to sustain this push.
To support the expansion, the Ministry of Finance is issuing 5 trillion yuan in special treasury bonds to recapitalize major state-owned banks. Economists estimate this could unlock up to 40 trillion yuan in additional lending capacity.
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#China #Macroeconomics #TradePolicy #Tariffs #RealEconomy #Manufacturing #Finance #Credit #GlobalTrade #Explainer
In the first quarter of 2025, Chinese banks issued 9.78 trillion yuan in new loans—around $1.36 trillion. While the total is historically high, the more important story is in the composition of the lending. New credit is being directed into core sectors of the real economy: lending to small and micro enterprises rose 12.2% year-on-year; long-term loans to the manufacturing sector increased by 9.3%; and consumer credit—particularly in housing—is gaining momentum. Interest rates remain near record lows, helping to sustain this push.
To support the expansion, the Ministry of Finance is issuing 5 trillion yuan in special treasury bonds to recapitalize major state-owned banks. Economists estimate this could unlock up to 40 trillion yuan in additional lending capacity.
📺 Watch the full breakdown
#China #Macroeconomics #TradePolicy #Tariffs #RealEconomy #Manufacturing #Finance #Credit #GlobalTrade #Explainer
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NewsTranscript
00:01As global trade frays and tariff threats escalate, China is doubling down on domestic growth.
00:06New data from the People's Bank shows that Chinese banks issued 9.78 trillion yuan in new loans during the first quarter of 2025.
00:15That's roughly 1.36 trillion U.S. dollars, one of the highest quarterly totals on record.
00:21The new loans are specifically targeted to strengthen the real economy.
00:24That means directing credit toward businesses that produce goods, provide services, and drive employment.
00:31The shift is already visible in the lending figures.
00:34Over the past year, lending to small and micro enterprises rose by 12.2 percent, with long-term credit to the manufacturing sector up 9.3 percent.
00:44Consumer lending is also picking up, driven in large part by renewed activity in the housing market.
00:49This shift comes as China prepares for a tougher external environment.
00:52With U.S. tariff proposals back on the table and global demand weakening, the focus is shifting to internal resilience.