China's aggregate financing unexpectedly rose 2.4 trillion yuan ($345 billion) in February, exceeding economists' median forecast of 2 trillion yuan. This surge in credit, released by the People's Bank of China, reflects improved corporate lending despite slower government bond sales. Financial institutions extended 900 billion yuan in new loans, also surpassing expectations.

The stock of loans to the real economy grew 6.1% year-over-year, matching a January record low. While corporate lending surged 60% to 890 billion yuan in February, household borrowing weakened with mortgage loans contracting. Government bond sales fell to 1.4 trillion yuan from 1.7 trillion yuan a year prior.

Capital Economics notes this shift toward government bonds as private borrowing demand lags, warning that reduced fiscal stimulus could weaken credit support. The central bank maintains ample liquidity but faces pressure to use interest-rate cuts more aggressively to sustain credit growth.