China's M2 Growth Slows to 7.5% in August as Social Financing Reaches 23.91 Trillion Yuan in 8 Months

China's central bank said at the end of August, broad money supply M2 stood at 356.81 trillion yuan, up 7.5% year on year, while narrow money supply M1 reached 115.77 trillion yuan, up 4.1%. The M2-M1 gap narrowed to 3.4 percentage points from 3.7% a month earlier. Jiemian News reported that the latest data also showed bonds have become an important financing channel for companies. In the first eight months, incremental social financing totaled 23.91 trillion yuan, down 2.64 trillion yuan from a year earlier. Net corporate bond financing came to 2.79 trillion yuan, up 1.23 trillion yuan year on year, lifting its share of social financing growth to 11.67%, up 5.8 percentage points. Government bond net financing reached 8.77 trillion yuan, down 1.5 trillion yuan, while non-financial corporate domestic equity financing was 470 billion yuan, up 203.1 billion yuan. Renminbi loans increased by 10.44 trillion yuan, with household loans down 1.03 trillion yuan and corporate and institutional loans up 11.26 trillion yuan. The report also quoted analysts from Orient Securities and Orient Finance, who said credit recovery depends on stronger fiscal support and a better transmission from monetary easing to credit demand. China's central bank said in its 2026 second-quarter monetary policy implementation report that it will continue to implement an appropriately loose monetary policy and use policy tools flexibly to keep liquidity ample and social financing conditions relatively loose.