New yuan loans extended by Chinese banks rose by a net CNY 60 billion in August of 2026, well bellow the CNY 590 billion from the corresponding period of the previous year, and well under median market expectations of a CNY 400 billion net gain. The result followed the CNY 340 billion net contraction in July, which was the sharpest decline on record, to hold the softening trend in banking credit activity as a slowing economy and poor consumer sentiment, particularly for housing, limited demand for loans. The trend also reflects the downturn for traditional sectors of the economy into tech, which commonly raises cash in the bond market instead of bank loans. Meanwhile, aggregate financing, a broader measure of credit in the Chinese financial system, was at CNY 1.66 trillion, reflecting a larger part of credit was raised through the issuance of government bonds. Outstanding loan growth was at 4.9% annually.