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14.08.202608:00:00UTC+00China’s July New Loans Turn Negative, Marking Sharp Reversal From June Expansion

China’s new loan data swung sharply into negative territory in July 2026, underscoring a sudden tightening in credit conditions after a strong expansion in the previous month.

According to the latest figures updated on 14 August 2026, new loans in China dropped to -340.0 billion yuan in July, a stark contrast to June 2026, when new lending stood at 1,610.0 billion yuan. The reversal suggests that instead of extending fresh credit, the banking system saw a net contraction in outstanding loans during the month.

The abrupt shift from robust positive growth in June to a negative reading in July is likely to draw close attention from markets and policymakers, as it may signal cooling demand for credit, stricter lending standards, or a combination of both within China’s financial system.

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