China’s bank lending has rebounded more than expected in March, with new loans totaling 3.64 trillion yuan ($500 billion), according to the People’s Bank of China (PBOC). This exceeds analyst predictions of 3 trillion yuan for the month.
The stronger-than-expected lending data has boosted confidence in the economy and delayed an expected cut in banks’ reserve requirement ratio (RRR). Analysts, including Dong Ximiao at Merchants Union Consumer Finance, said that financial data for March and the first quarter are better than expected.
However, China is still facing challenges from an escalating trade war with the US. The tariffs have put immense pressure on China’s exporters and its manufacturing sector, particularly when domestic demand remains sluggish and deflationary pressures persist.
To counter this impact, policymakers pledge to step up stimulus measures. Financial News, a PBOC publication, stated that room for macro policies is still available and that China will increase countercyclical adjustments according to situational needs and external influences.
The central bank also reported that outstanding yuan loans rose 7.4% in March from a year earlier, while broad M2 money supply grew 7.0% on-year. Analysts had expected growth to remain steady.
Despite these positive signs, some analysts expect an imminent cut to the RRR due to the escalating trade war. However, this is no longer seen as urgent after the US excluded some electronics imported from China from steep tariffs.
Source: https://www.reuters.com/world/china/china-march-new-bank-loans-rise-364-trln-yuan-beating-expectations-2025-04-13