Structural changes in China’s economy reduce loan demand despite stable GDP growth and reflation, analysts say.
China’s loan growth has decelerated sharply, even as real GDP remains stable and inflation pressures ease. The slowdown spans housing-related lending and other sectors, including traditionally resilient industries like services and light manufacturing.
Analysts highlight a structural shift toward high-tech and service-driven growth, which rely less on bank loans and more on direct financing. This transition aims to improve debt sustainability but may keep interest rates low amid abundant savings and weak loan demand.
The trend reflects broader efforts to rebalance China’s economy away from debt-heavy infrastructure and property sectors toward innovation-led growth.