Beijing’s long-standing efforts to reinvigorate the domestic economy continue to face headwinds, as the latest credit data points to persistently sluggish consumption and weak investment across China, with the tech sector standing out as a lone bright spot amid the central government’s push for innovation to reduce external reliance.

New bank loans totalled 520 billion yuan (US$77 billion) in May, according to People’s Bank of China data released on Friday. The figure trailed the 620 billion yuan recorded during the same period last year, underscoring a marked underperformance across both corporate and household lending, the two main categories.

Analysts at China International Capital Corporation (CICC) said in a report on Friday that households’ weak appetite for debt was increasingly spilling over into the corporate sector. Official data showed that the value of outstanding household lending fell by 141 billion yuan in May, bringing the cumulative drop for the first five months of 2026 to 631 billion yuan, relative to the end of last year.

A chief economist at a domestic securities brokerage, speaking on condition of anonymity, said that “over the past two years, financial regulators have rolled out several measures to shore up household demand, including interest rate cuts, consumption loan interest subsidies, and others”.

However, “those moves have yielded limited results in both the housing market and consumer spending”, the source contended.

In its report, CICC noted how “deleveraging households and weak consumption have dented companies’ willingness to borrow and invest, particularly in traditional industries”.

“Coupled with uncertainties stemming from overseas geopolitical tensions, manufacturing investment has weakened notably since March,” the analysts wrote. “The economic recovery remains under structural pressure, and we expect this situation to persist through the year.”