New bank lending in China likely increased in December compared with November, a Reuters poll indicated on Friday, as government stimulus measures gradually boosted demand for credit, which had been dampened by a housing downturn.

According to the average of 19 economists surveyed by Reuters news agency, Chinese banks are expected to have extended around 800 billion Yuan ($114.6 billion) in net new Yuan loans last month, up from 390 billion Yuan in November.

However, this figure remains below the 990 billion Yuan in loans issued in December 2024.

The Chinese economy may already be seeing early gains from a 500 billion Yuan policy-based financial tool introduced by Beijing in September to support project financing.

Chinese officials reported that the financial instrument was fully deployed by late October, funding over 2,300 projects with a total investment of about 7 trillion Yuan.

Factory activity in China unexpectedly expanded in December, ending a record eight-month streak of contraction, supported by a surge in pre-holiday orders.

Moreover, a separate private-sector PMI also indicated modest growth last month, fuelled by higher production and stronger domestic demand.

Beijing has been promoting stronger consumption to reduce the world’s second-largest economy’s dependence on exports and investment, pledging additional stimulus measures this year.

Despite resilient exports, growth momentum has slowed due to weak household spending, ongoing deflation, and a prolonged property sector downturn.

At the close of 2025, President Xi Jinping promised “more proactive” macroeconomic policies, offering some reassurance amid the slowdown observed in the latter half of last year.

The broader M2 money supply likely rose 8.0% year-on-year in December, matching November’s growth, according to the poll.

Economists projected that outstanding Yuan loans increased 6.3% year-on-year in December, slightly down from 6.4% growth in November.