FX Factors: China Credit and Currency Outlook

China began 2026 with a massive credit surge (RMB 7.22trn) to chase growth targets despite a persistent housing collapse. Lloyds expects a shift toward infrastructure investment and renminbi appreciation to rebalance the economy.

Key Takeaways

• 1.China's credit expansion surged in January 2026 with Total Social Financing reaching RMB 7.220trn, representing roughly 5% of annual GDP in a single month.
• 2.The Chinese housing market remains in a deep slump with a 33-month losing streak in home prices and a massive inventory overhang.
• 3.Investment focus is shifting from property and saturated manufacturing (like EVs) toward large-scale infrastructure and high-tech sectors like AI chip plants.

Table of Contents

• Ebb and flow...
• Bumper start to 2026 lending, but plenty of questions
• Market Insights Team
• Disclaimer information
• Important Notice & Additional Disclaimer

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