China's new aggregate financing rose 27.3% YoY in the first half of the year, up to RMB 22.83tr. While the aggregate financing growth looks quite impressive at first glance, it is mainly base effect driven, caused by a particularly weak 2024, as well as being tied to an uptick in bond issuance and IPO activity, while credit demand continued to be lacklustre despite the September 2024 and May 2025 rate cuts. Government bond issuance contributed the majority of the aggregate financing growth, up 129.4% YoY in 1H25. Of the total RMB 4732bn uptick between 1H24 and 1H25, the uptick in government bond issuance accounted ... (full story)