Pan Gongsheng: 2025 Social Financing Increment Reaches RMB 35.6 Trillion as Direct Financing Share Tops Loans

On September 16, 2026, Pan Gongsheng, secretary of the Party Committee and governor of the People's Bank of China, published a signed article titled "Deeply Understanding the Changes in China's Financial Structure and Improving the Adaptability of Financial Services to the Real Economy." The article discussed changes in China's financial structure, the evolution of the financing mix, and the adaptability of financial services to the real economy.

The article noted that before 2013, newly added indirect financing accounted for more than 80% of the increment in social financing, essentially consisting of loans. In 2025, the increment in social financing was RMB 35.6 trillion, of which corporate bonds, government bonds and equity financing together accounted for about 47%, exceeding loans for the first time.

Data in the article showed that the ratio of the increment in corporate bond financing to the increment in loans over the same period rose from 7% in 2023 to nearly 20% in the first half of 2026. In the first eight months of 2026, the share of bond and equity financing in the increment in social financing clearly exceeded the share of loans, with corporate bonds rising to 11.67% of the increment in social financing, up 5.8 percentage points from the same period in 2025. In terms of stock, at the end of June 2026, the share of indirect financing in the outstanding balance of social financing fell to about two-thirds, and the share of outstanding loans fell to about 60%; the share of direct financing rose to about one-third, and the share of bond financing rose to about 30%.

In terms of the destination of funds, over the past 10 years, the share of new loans to real estate and infrastructure construction in all loans fell from more than 60% to about 10%, while the share of new loans in the areas of the "five major articles" of finance rose to more than 70%. The article noted that in recent years, loan growth for technology-based small and medium-sized enterprises remained at around 20%, inclusive small and micro loans grew at an average annual rate of about 20%, and green loans and elderly care industry loans both maintained double-digit growth, all significantly higher than the growth rate of all loans.

Regarding financial markets, the article noted that there are currently more than 5,500 A-share listed companies, with total market capitalization exceeding RMB 110 trillion, ranking second globally, including more than 2,000 "specialized, refined, distinctive and innovative" enterprises. When the interbank bond market was established in 1997, its balance was less than RMB 500 billion; it now exceeds RMB 200 trillion, firmly ranking second in the world. More than a year after the launch of the bond market's "technology board," cumulative issuance of science and technology innovation bonds reached about RMB 3 trillion.

The article noted that China's outstanding social financing currently exceeds RMB 460 trillion, broad money balance exceeds RMB 350 trillion, and loan balance exceeds RMB 280 trillion. The article proposed that slower growth in financial aggregates is conducive to keeping the macro leverage ratio basically stable. In recent years, China's macro leverage ratio rose relatively quickly. On the one hand, this came from stronger countercyclical macro policy adjustment to promote stable economic growth; financial aggregates and debt growth are two sides of the same coin, pushing up the scale of debt. On the other hand, it came from low prices, which dragged down nominal economic growth. The article proposed balancing short-term and long-term relationships, avoiding financial aggregate growth exceeding the needs of the real economy, which could cause idle funds to accumulate, further push up the macro leverage ratio, make it difficult to clear out outdated capacity and inefficient enterprises, and affect economic efficiency.

The article noted that slower loan growth with improved quality is one of the changes facing macroeconomic operations. Of the current loan balance of more than RMB 280 trillion, loans to real estate and local government financing vehicles still account for a relatively large share. These areas are not only no longer growing, but are actually declining. From 2025 to the first half of 2026, the outstanding balance of real estate loans fell by more than RMB 2 trillion cumulatively. Loans in other areas must first fill this decline before they can generate growth in the total. The article also noted that in traditional sectors, the ratio of medium- and long-term loan balances to industry value added is greater than 1, with real estate and transportation at 1.7 and 3.3 respectively; in new growth driver sectors, the ratio of medium- and long-term loan balances to industry value added is generally below 1, with information services at only about 0.1. In the first half of 2026, new growth drivers, represented by high-end manufacturing, contributed more than 40% to economic growth.

Regarding policy arrangements, the article noted that the "15th Five-Year Plan for Building a Financial Power" was recently issued, setting out systematic arrangements for financial work at present and for a period ahead. The People's Bank of China formulated and issued the "15th Five-Year Reform and Development Plan of the People's Bank of China," and introduced nine supporting action plans in related areas.

Second, strengthen policy coordination and improve the quality and efficiency of financial services for key areas and weak links of the national economy. Third, focus on the needs of serving economic structural transformation and upgrading, and continue to build a standardized, open, dynamic and resilient modern financial market. Fourth, improve a comprehensive macroprudential management system, maintain a dynamic balance at the macro level among economic growth, economic structural adjustment and financial risk prevention, steadily defuse risks in key areas, and continue to do a good job in financial support for defusing debt risks of local government financing vehicles.