Financing growth remains stable, but its composition is changing

At the end of September, outstanding aggregate financing to the real economy reached RMB 468.17 trillion, an increase of 7.1% year on year. Broad money supply (M2) grew by 7.2%. The figures indicate that overall financial conditions remain supportive, although aggregate growth alone does not reveal how effectively funds are reaching individual companies or sectors.

The more significant development is the changing mix of financing. During the first three quarters, net corporate bond financing reached RMB 2.75 trillion, while domestic equity financing by non-financial enterprises totaled RMB 535.9 billion. Bond and equity financing together represented almost half of the increase in aggregate financing, exceeding the contribution from bank loans.

This shift partly reflects changing demand across the economy. Credit demand from property-related activities and local-government financing platforms has weakened, while technology and other growth sectors are using a wider range of funding channels. The result is a financing system in which capital markets increasingly complement bank lending.

Bonds and equity offer alternatives to conventional credit

Corporate bond financing has become a more significant source of funding. Outstanding corporate bonds grew by 9.3% year on year at the end of September. The increase suggests that bond markets are playing a larger role in corporate funding, rather than serving only as a supplementary channel for a limited group of large issuers.

For businesses, bonds can provide access to longer-term funding and reduce dependence on bank credit. Equity financing can support expansion, research and development, or investment where companies prefer not to increase debt. These instruments are not interchangeable: bonds require repayment and interest servicing, while equity financing dilutes ownership and may involve greater disclosure and governance requirements.

The practical opportunity is therefore to match financing instruments to business needs and maturity. Companies with predictable cash flows may be better positioned to service debt, while businesses with high growth potential but uncertain near-term earnings may find equity more suitable. However, capital-market access is not automatic, and smaller or less-established companies may still depend heavily on bank lending.

Credit is increasingly directed towards strategic and underserved sectors

Bank lending continues to support corporate investment. Enterprise and institutional loans increased by RMB 12.55 trillion in the first nine months, including RMB 6.53 trillion in medium- and long-term lending. This provides funding for investment and operating activities, although the aggregate figures do not establish how much of the lending has translated into new productive capacity.

The composition of credit is also changing. Lending to technology, green development and inclusive-finance activities continued to grow faster than overall loans. At the end of September, outstanding loans to micro and small businesses under the inclusive-finance category reached RMB 38.50 trillion, while medium- and long-term loans to the service sector excluding real estate reached RMB 62.81 trillion. Both grew faster than total outstanding loans.

This pattern reflects the use of targeted monetary-policy instruments to steer financing towards designated priorities. For companies operating in technology, advanced manufacturing, green industries and eligible small-business segments, these conditions may improve access to credit. Nevertheless, policy priorities do not guarantee funding: lenders will continue to assess repayment capacity, collateral, business models and risk.