New bank loans in China fell by CNY 50 billion in July, marking the first monthly decline since 2005. This reverses June’s CNY 2.24 trillion increase and comes sharply below the market expectation of CNY 300 billion growth. Banks are typically less aggressive in meeting quarterly lending targets in July, which weighed on financing activity. Total social financing, a broad measure of credit and liquidity, rose by CNY 1.16 trillion in July, down sharply from CNY 4.20 trillion in June but still above CNY 0.77 trillion a year earlier, well below market expectations of CNY 1.50 trillion. Meanwhile, outstanding loans expanded 6.9%, the slowest pace since 1998, slowing from 7.1% in June and below the anticipated 7%. In contrast, M2 money supply growth accelerated to 8.8%, up from 8.3% in June and surpassing forecasts of 8.2%.