China's financial data signals a shift toward confidence

China's financial system continued to support the real economy in the first half of 2026, data from the People's Bank of China, the country's central bank, showed on Wednesday. Outstanding aggregate financing to the real economy reached 462.06 trillion yuan ($68.15 trillion) by the end of June, up 7.4% year on year, highlighting continued financial support for economic activity.

Yuan loans to the real economy stood at 279.16 trillion yuan, accounting for more than 60% of the total social financing. Government bonds were a major contributor to the financing growth, with the outstanding balance rising 14.2% to 101.36 trillion yuan ($14.95 trillion), reflecting continued fiscal support for key projects and economic development.

Money supply data further highlights the changing economic environment. Broad money supply, or M2, rose 8% year on year to 356.71 trillion yuan at the end of June. 

Businesses remained a key driver of credit demand. Loans to enterprises and institutions increased by 11.13 trillion yuan, supporting sectors including manufacturing, infrastructure and emerging industries.

China's external financial position also remained stable. Foreign exchange reserves stood at $3.42 trillion at the end of June, while cross-border yuan settlement continued to expand, reflecting steady progress in the international use of the Chinese currency.

Overall, the first-half financial data shows that monetary policy has provided solid support for the real economy. Looking ahead, China's credit growth is expected to shift from expansion in scale to improvement in quality.