China’s Q1 Social Financing Surges to Support Real Economy Growth

China’s social financing scale saw a cumulative increase of 15.18 trillion yuan in the first quarter of 2025, representing an increase of 2.37 trillion yuan compared to the same period in the previous year, according to preliminary statistics from the central bank.

The data, released by the People’s Bank of China (PBC), indicates a sustained effort to provide financial support to the real economy. RMB loans issued to the real economy increased by 9.7 trillion yuan during this period, which is 586.2 billion yuan higher than the year-on-year figure.

Breakdown of Financing Components

The growth in social financing was driven by several distinct channels, with government bonds playing a significant role. Net financing of government bonds reached 3.87 trillion yuan, an increase of 2.52 trillion yuan year-on-year.

Other key components of the first quarter financing include:

• Net financing of corporate bonds: 525.1 billion yuan, down 472.9 billion yuan year-on-year.
• Unaccepted bank bills: 530 billion yuan, down 20.2 billion yuan year-on-year.
• Domestic equity financing of non-financial enterprises: 96.2 billion yuan, up 19.9 billion yuan year-on-year.
• Trust loans: 53.1 billion yuan, down 145.2 billion yuan year-on-year.
• Entrusted loans: 5.5 billion yuan, up 105 billion yuan year-on-year.

Foreign currency loans issued to the real economy, when converted into RMB, decreased by 96.7 billion yuan, marking a decline of 249 billion yuan year-on-year.

Loan Distribution by Sector

RMB loans increased by 978 billion yuan in the first quarter. The distribution of these loans across different sectors shows varying trends in credit demand and availability.

Loans to enterprises and institutions increased by 866 billion yuan. Within this sector, medium and long-term loans rose by 558 billion yuan, and short-term loans increased by 351 billion yuan, while bill financing decreased by 544.2 billion yuan.

Household loans increased by 104 billion yuan, with medium and long-term loans rising by 883.2 billion yuan and short-term loans increasing by 160.3 billion yuan.

Conversely, loans to non-bank financial institutions saw a decrease of 86.6 billion yuan.

Monetary Aggregates and Liquidity

Central bank data reveals the state of broad and narrow money supplies at the end of March 2025. The balance of broad money (M2) stood at 3,260.6 trillion yuan, reflecting a 7% increase year-on-year.

The balance of narrow money (M1) was 1,134.9 trillion yuan, up 1.6% year-on-year, while the balance of currency in circulation (M0) was 130.7 trillion yuan, an increase of 11.5% year-on-year.

Net cash injection for the first quarter was 249.8 billion yuan.

Extended Financial Trends in 2025

Following the first quarter, data for the first four months of 2025 showed that social financing surged to 16.34 trillion yuan, a year-on-year increase of 3.61 trillion yuan. During this expanded period, yuan loans increased by 10.06 trillion yuan.

By the end of April 2025, the broad money supply (M2) was 325.17 trillion yuan, up 8% year-on-year, and the narrow money supply (M1) was 109.14 trillion yuan, up 1.5%.

Further data for the first three quarters of 2025 indicated a total social financing increment of 30.09 trillion yuan, which was 4.42 trillion yuan higher than the same period in 2024. By the end of September 2025, the growth rate of social financing stock had risen by 8.7% year-on-year.

Reporting on the third quarter of 2025 noted that government and corporate bonds contributed over 40% to new social financing, signaling a shift toward direct financing within the Chinese financial system.