Eurodollar University WE NEED To Talk About Chinese Banks IMMEDIATELY
7 snips
Jan 16, 2026 Dive into the latest troubling indicators from China, where bank lending has plummeted to the lowest levels since 2018. Discover the severe collapse of household lending and its alarming implications. The case study of China Vanke reveals the deep systemic stress in the real estate sector. Learn why the central bank hesitates to cut rates despite a seemingly strong yuan and trade surplus, which may be hiding the true state of the banking crisis. It's an eye-opening look at the fragile financial landscape in China.
AI Snips
Chapters
Transcript
Episode notes
Sharp Fall In 2025 Bank Lending
- China's bank lending fell sharply in 2025, with total new RMB loans almost 9% below 2024 and December at $980 billion.
- The collapse highlights a deep, systemic credit contraction that worsened from mid-year onward.
Recapitalization Was A Defensive Move
- The announced bank recapitalization targeted the largest state-owned banks rather than the broader system and didn't function as broad stimulus.
- Its real purpose was to prepare big banks as shock absorbers for potential spillovers, not to revive lending.
Household Credit Essentially Vanished
- Household lending effectively collapsed in 2025, with net new household loans for the year around 44 billion yuan.
- That compares to roughly 8 trillion yuan in 2021 and demonstrates extreme household retrenchment after policy rescues.