China's Economic Weakness Persists as Household Loan Demand Shrinks for First Time in 30 Years
Amid China's persistent economic weakness, citizens are reluctant to take on loans for consumption. A report from China's National Institution for Finance & Development (NIFD) indicates that in the first quarter of this year (2026), the growth rate of household and individual debt was -0.4%, the first negative growth since the third quarter of 1995. Despite recent signs of a "brief spring rebound" in the property market, mortgage lending remains in negative territory. This trend is driven by pessimistic outlooks on income and employment, leading people to deleverage by paying off old debts rather than taking on new ones.
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- 📰 Published: May 19, 2026 at 17:38
- 🔍 Collected: May 19, 2026 at 18:02 (23 min after Published)
- 🤖 AI Analyzed: May 19, 2026 at 18:14 (12 min after Collected)
(CNA, Taipei, May 19) As China's economy remains weak, the public is unwilling to take out loans for consumption. A report by China's National Institution for Finance & Development (NIFD) points out that in the first quarter of this year, the growth rate of household and individual debt in China was -0.4%, marking the first negative growth since the third quarter of 1995. Even with recent signs of a "brief spring rebound" in China's real estate market, mortgage lending continues to show negative growth.
An article published by Chinese media outlet Yicai on the 17th, citing NIFD's "Q1 2026 Macro Leverage Ratio Report," showed that the growth of household and individual debt was -0.4% in the first quarter, the first instance of negative growth since Q3 1995.
Within this, mortgage growth is projected to fall from -1.8% at the end of 2025 to -2.6%, marking 12 consecutive quarters of negative growth since Q2 2023. The growth of consumer loans (excluding mortgages) fell from 0.7% at the end of 2025 to -1.2%, its first-ever negative growth. The growth of business-related loans was 3.7%, a decrease of 0.3 percentage points from the end of 2025.
The article also noted that since 2026, China's real estate market has steadily improved, with the warming trend from Q1 continuing into April. The transaction area of commercial housing in 30 large and medium-sized cities increased by 3.3% year-on-year, ending a previous continuous decline. However, the property market transactions stand in stark contrast to the public's credit data.
According to data from China's central bank, new RMB loans saw a rare net decrease of 10 billion yuan in April, mainly due to reduced borrowing by the public. Household loans decreased by 786.9 billion RMB in April, with reductions across short, medium, and long-term loans. This indicates a comprehensive contraction in demand for both consumer loans and mortgages, reflecting that the public is not only significantly reducing demand for new borrowing but also tending to repay old debts ahead of schedule.
The article stated that poor public expectations for income and employment prospects, coupled with a seasonal decline in demand, led to a significant drop in credit in April. Lian Ping, chairman of the China Chief Economist Forum, said that household and individual credit in China decreased sharply in April, with the total volume of bank loans such as consumer loans, car loans, and mortgages falling more than in the same period last year. With no signs of a rebound in national housing prices and sluggish demand for home purchases, insufficient growth in mortgage lending has dragged down overall credit growth.
Other experts believe that many Chinese citizens have shifted from a habit of "leveraging up" to "deleveraging," with the proportion of self-funded home purchases increasing significantly, leading to a reduction in mortgages. (Editors: Chen Kai-yu / Chiu Kuo-chiang) 1150519
An article published by Chinese media outlet Yicai on the 17th, citing NIFD's "Q1 2026 Macro Leverage Ratio Report," showed that the growth of household and individual debt was -0.4% in the first quarter, the first instance of negative growth since Q3 1995.
Within this, mortgage growth is projected to fall from -1.8% at the end of 2025 to -2.6%, marking 12 consecutive quarters of negative growth since Q2 2023. The growth of consumer loans (excluding mortgages) fell from 0.7% at the end of 2025 to -1.2%, its first-ever negative growth. The growth of business-related loans was 3.7%, a decrease of 0.3 percentage points from the end of 2025.
The article also noted that since 2026, China's real estate market has steadily improved, with the warming trend from Q1 continuing into April. The transaction area of commercial housing in 30 large and medium-sized cities increased by 3.3% year-on-year, ending a previous continuous decline. However, the property market transactions stand in stark contrast to the public's credit data.
According to data from China's central bank, new RMB loans saw a rare net decrease of 10 billion yuan in April, mainly due to reduced borrowing by the public. Household loans decreased by 786.9 billion RMB in April, with reductions across short, medium, and long-term loans. This indicates a comprehensive contraction in demand for both consumer loans and mortgages, reflecting that the public is not only significantly reducing demand for new borrowing but also tending to repay old debts ahead of schedule.
The article stated that poor public expectations for income and employment prospects, coupled with a seasonal decline in demand, led to a significant drop in credit in April. Lian Ping, chairman of the China Chief Economist Forum, said that household and individual credit in China decreased sharply in April, with the total volume of bank loans such as consumer loans, car loans, and mortgages falling more than in the same period last year. With no signs of a rebound in national housing prices and sluggish demand for home purchases, insufficient growth in mortgage lending has dragged down overall credit growth.
Other experts believe that many Chinese citizens have shifted from a habit of "leveraging up" to "deleveraging," with the proportion of self-funded home purchases increasing significantly, leading to a reduction in mortgages. (Editors: Chen Kai-yu / Chiu Kuo-chiang) 1150519