January-February Social Financing Increment Increases by 316.2 Billion Yuan Year-on-Year; Experts: High-Tech Manufacturing Growth Momentum Continues to Emerge

The People’s Bank of China released financial statistics for February on March 13. As of the end of February, the total social financing stock was 451.40 trillion yuan, up 8.2% year-on-year; from January to February, the incremental social financing was 9.60 trillion yuan, an increase of 3,162 billion yuan compared to the same period last year.

Industry experts analyze that PMI during the month of the Spring Festival usually fluctuates significantly, especially this year when the holiday was extended and fell entirely in mid to late February, inevitably affecting business operations. The manufacturing Purchasing Managers’ Index (PMI) in February decreased by 0.3 percentage points from the previous month, indicating a slight decline in manufacturing activity, but growth momentum in high-tech manufacturing continued to be strong, remaining in expansion territory.

By the end of February, broad money (M2) stood at 349.22 trillion yuan, up 9.0% year-on-year, maintaining the same growth rate as the previous month and 2.0 percentage points higher than the same period last year.

Experts note that the growth rates of total social financing and M2 are both significantly higher than the nominal GDP growth rate, continuing a rapid growth trend that creates a favorable monetary and financial environment for economic recovery.

Private Enterprise Re-lending Accelerates

Industry experts state that in recent years, the People’s Bank of China has continued to guide financial institutions to enhance the stability and sustainability of credit growth. Commercial banks have become more focused on coordinating their annual credit deployment plans, improving the match between credit supply and real economic financing needs, and avoiding large fluctuations caused by “timing peaks.” In the first two months of this year, credit issuance has been more stable and balanced. The “credit surge” in January has eased, and despite the shorter working days in February due to the Spring Festival holiday, credit growth remained steady.

On the demand side, policies to expand domestic demand and the extended holiday have boosted consumption, driving credit demand. Experts say that the Central Economic Work Conference has set a goal to continue expanding domestic demand and optimizing supply by 2026. Coordinated efforts of monetary and fiscal policies are gradually showing results. For example, one-time credit repair policies help individuals with damaged credit records reduce their burdens, restoring their ability to access financial services and participate in economic activities. Fiscal interest subsidy policies help lower costs for consumers and businesses, releasing consumption potential and supporting enterprise development. The gradual implementation of consumption-promoting policies, combined with the holiday-driven consumption boost, is steadily increasing loan demand in related sectors.

On the supply side, re-lending to private enterprises is accelerating, guiding more credit resources toward small and micro private firms. At the beginning of the year, after the central bank announced dedicated re-lending for private enterprises, the first batches of such loans have been rolled out in Beijing, Hubei, Zhejiang, Chongqing, and other regions.

Industry experts believe that since March, companies have gradually resumed work after the holiday, with financing needs accelerating. Coupled with the detailed implementation of various policies after the “Two Sessions,” major projects under the “14th Five-Year Plan” are speeding up, which is expected to promote steady release of supporting financing demand and continue a reasonable growth trend in total financial volume.

Evaluating Financial Support for the Real Economy with Multiple Indicators

Experts suggest that assessing the strength of financial support for the real economy should focus more on broader indicators such as total social financing and money supply.

In recent years, with the development of financial markets and innovation in financing tools, corporate financing channels have shifted from reliance solely on bank loans to a mix of bonds, stocks, and other methods. Loan growth alone no longer fully reflects the extent of financial support for the real economy. Companies choose among various financing options based on operational needs and costs, creating dynamic relationships between different channels. Short-term fluctuations in loan growth are not reliable signals of changes in financial support. Ultimately, regardless of the funding source, all capital flows into production, operations, and investment activities.

The Government Work Report states that the expected economic growth target for 2026 is 4.5%–5%. Experts note that this target considers both domestic economic conditions and external environments, balancing needs and possibilities, leaving room for structural adjustments, risk prevention, and reforms, which can also boost public confidence. With the implementation of macro policies, there is a solid foundation and good prospects for achieving economic development goals.

Some experts also mention that in the long term, expanding domestic demand requires changing residents’ expectations of future income stability. Continued deepening of income distribution reforms, establishing mechanisms for stable wage growth, improving social security systems such as employment, education, healthcare, and pensions, and reducing residents’ living burdens are essential. Additionally, exploring channels to increase residents’ property income—such as the rising popularity of savings bonds amid falling interest rates—can further enhance fiscal and monetary policy synergy, boosting residents’ income and consumption potential.

Spring Festival Timing Shift and Consumption Recovery Drive CPI Increase

On March 6, during the fourth session of the 14th National People’s Congress, at a press conference on economic topics, People’s Bank of China Governor Pan Gongsheng stated that in 2026, the central bank will continue to implement a moderately loose monetary policy, prioritizing economic stability and reasonable price levels.

In February 2026, the Consumer Price Index (CPI) month-on-month increase expanded from 0.2% to 1.0%, the highest in nearly two years; year-on-year, it rose 1.3%, an increase of 1.1 percentage points from the previous month and the highest in three years, significantly exceeding market expectations. Experts attribute this to the longer Spring Festival holiday this year, which concentrated consumption demand and pushed up service prices, notably in airline tickets, transportation rentals, and hotel accommodations. Prices for fresh vegetables, beef, mutton, and fresh fruits also saw larger increases compared to last month. The CPI surge is also related to the shift of the Spring Festival from January last year to February this year. According to historical seasonal patterns, post-holiday prices tend to decline.

In February, the Producer Price Index (PPI) rose by 0.4% month-on-month, marking five consecutive months of increase; year-on-year, it declined by 0.9%, narrowing by 0.5 percentage points from the previous month, with the decline easing for three consecutive months. Experts say that macro policies introduced earlier are beginning to show effects, leading to positive changes in PPI. Demand for industries related to “AI+”, robotics, and environmental protection equipment continues to grow, boosting prices year-on-year. Additionally, capacity management and market competition improvements in key industries like photovoltaics, lithium batteries, coal, and new energy vehicles have stabilized and increased prices. Geopolitical factors have also caused a significant rise in international crude oil prices, impacting domestic prices.

Experts emphasize that price targets are medium-term guiding indicators and should be viewed from a long-term perspective. The recent positive price movements reflect the strengthening of macro policy coordination. As the domestic unified market deepens, new growth drivers develop, and targeted consumption policies are implemented, supply and demand are expected to better match, promoting a smoother circulation of the real economy.