China’s September trade figures showed strong external activity, with equipment manufacturing contributing most of the export increase over the first nine months. Credit conditions were less uniform. Corporate borrowing expanded, while household loans contracted and bonds accounted for a larger share of outstanding financing.

Producer prices also rose considerably faster than consumer prices, with commodity costs contributing to the increase. Visa gained approval to prepare domestic card clearing operations, while Chinese policymakers supported banking-system liquidity and outlined financing channels for wider international use of the renminbi.

Read more on the week’s key developments:

1. Equipment exports support China’s September trade growth

China’s exports increased 29.6% year on year in renminbi terms to RMB 3.03 trillion ($450.6 billion) in September, while imports rose 24.6% to RMB 2.13 trillion ($316.7 billion), according to customs figures released on 14 October. Total goods trade grew 18.8% over January–September. Quarterly trade growth accelerated from 15.3% in the first quarter to 22.3% in the third, with September marking the sixth consecutive month of double-digit growth in total trade.

Equipment manufacturing contributed nearly 90% of the export increase over the first nine months. Integrated-circuit exports rose 99.1%, while electric-vehicle exports increased 72.3%, showing the contribution of technology and advanced manufacturing to external sales. Intermediate goods accounted for more than half of exports, reflecting China’s role in international production networks.

2. Household loans contract as financing shifts towards bonds

China’s renminbi loans increased RMB 11.52 trillion ($1.71 trillion) in the first three quarters, the People’s Bank of China reported on 14 October. Household loans contracted RMB 1.03 trillion ($153.2 billion), contrasting with a RMB 12.55 trillion ($1.87 trillion) increase in lending to enterprises and public institutions. Short-term loans accounted for the household contraction, while household medium- and long-term loans increased slightly.

Bond financing gained ground alongside the uneven lending performance. Government bonds’ share of outstanding aggregate financing to the real economy rose 1.3 percentage points year on year to 22.5%, matching the decline in renminbi loans’ share to 59.8%. Corporate bond financing also increased compared with the previous year. The figures show funding reaching the economy through a changing mix of channels, while net household borrowing remained weak.

3. Commodity costs lift producer prices faster than consumer inflation

China’s consumer price index increased 0.9% year on year in September, while producer prices rose 5.0%, the National Bureau of Statistics reported on 14 October. On a monthly basis, consumer prices increased 0.2% and producer prices 1.2%. Core consumer inflation, excluding food and energy, remained at 1.0% year on year. Prices for production materials rose 6.5%, while consumer goods prices at the factory gate fell 0.1%.

The bureau attributed much of the monthly producer-price increase to international oil and non-ferrous metal prices, alongside changes in domestic energy and raw-material supply and demand. Some costs reached consumer products, with mobile phone and computer prices rising during the month. However, these increases coexisted with subdued core inflation and a seasonal decline in travel-related service prices after the summer holidays.

4. Visa’s clearing approval opens a route into China’s domestic payments infrastructure

Visa received approval from the People’s Bank of China on 13 October to prepare a domestic bank card clearing institution through Visa Information Technology (Beijing). The entity must complete preparations within one year before applying for an operating licence, subject to approval by the central bank and the National Financial Regulatory Administration. The decision advances Visa towards processing domestic renminbi card transactions, extending beyond its existing cross-border business.

China’s mobile wallets offer distribution channels for international card schemes alongside competition. In June 2024, shortly after beginning domestic operations, Mastercard NetsUnion described partnerships with more than 30 wallets, including Alipay and Tenpay, allowing locally issued Mastercard cards to be used through familiar payment interfaces. Its experience shows how domestic card issuance and clearing can connect with established wallets. Visa’s announcement did not specify equivalent domestic wallet arrangements.

5. PBOC bank adds six-month funding ahead of October maturities

The People’s Bank of China conducted a RMB 700 billion ($104.1 billion) six-month outright reverse repo on 15 October, against RMB 500 billion ($74.3 billion) of maturing operations of the same tenor. The transaction therefore added RMB 200 billion ($29.7 billion) through this facility. Its 182-day term runs to April 2027. The operation used a fixed quantity with interest-rate bidding and multiple-price awards, following an announcement on 14 October.

The additional funding helps banks manage a month of substantial medium-term liquidity maturities, government debt issuance and late-month tax payments. Providing six-month funds in advance extends support beyond those immediate demands and reduces the need to replace that portion of funding through repeated short-term borrowing. No policy-rate reduction was announced alongside the operation.

6. China calls for joint action on global imbalances as renminbi strengthens

People’s Bank of China Governor Pan Gongsheng said on 15 October that exchange-rate adjustments alone could not resolve global economic imbalances, calling on surplus and deficit economies to share responsibility. Speaking at the G20 finance ministers and central bank governors’ meeting in Bangkok, he urged greater attention to capital flows alongside current-account balances. He also warned that sovereign bond market volatility and the risk of corrections in artificial intelligence-related asset valuations had increased financial vulnerabilities.

The remarks followed the central bank’s 9 October position paper rejecting competitive currency depreciation and came as the onshore renminbi traded around 6.69 per dollar on 16 October. Pan’s argument extends the debate beyond exchange rates and trade balances to the financial flows connecting economies. He also cautioned that modernising financial regulation should not mean deregulation or weaken financial stability and resilience.

7. PBOC’s Tao Ling links renminbi internationalisation to offshore funding

People’s Bank of China Deputy Governor Tao Ling said on 16 October that the central bank would continue supporting overseas renminbi lending and cross-border trade finance, while improving banks’ cross-border interbank funding arrangements. Speaking at the Global Asset Management Forum’s Shanghai Suhewan conference, she also outlined support for panda bonds issued by overseas borrowers in mainland China, Hong Kong’s offshore renminbi bond market and wider use of currency-swap funding arrangements.

Tao explained that China’s trade surplus makes it harder to supply renminbi overseas through trade, increasing the importance of financing channels, according to a Sina Finance report. Overseas users need to obtain the currency, use it conveniently and hold suitable assets over time. This connects offshore lending and liquidity provision with the development of investable renminbi assets.

8. More financial institutions seek access to digital renminbi cross-border platform

An additional 39 domestic and overseas financial institutions had applied by September’s end to join the digital renminbi cross-border settlement platform CBETS as direct participants, Xinhua reported on 1 October. They follow an initial 26 institutions that signed agreements in June. The platform supports direct institutional access and connections with overseas payment systems. It had connected with Hong Kong’s Faster Payment System and Laos’s National Payment Network, while supporting a cross-border payment pilot involving Singapore.

The services extend beyond traveller payments into trade settlement and financing. A September announcement on China–Laos connectivity said some Lao banks had joined CBETS and opened its CBETS LIFT trade service, which brings together trade information, documents and funding flows. The 39 applications represent prospective participation, rather than completed connections.

9. Corporate hedging disclosures show wider use of China’s futures markets

A total of 1,892 non-financial A-share companies disclosed hedging activity over January–September, representing 35.4% of that group, China Securities Regulatory Commission official Wang Ying said on 14 October. Speaking at an industry conference, she reported that corporate customers’ average daily trading volume and open interest increased 3.25% and 5.81% year-on-year, respectively. China had 171 listed futures and options products, covering agricultural goods, metals, energy, shipping and financial markets.

Access for overseas participants remains differentiated by route. Thirty-eight designated products were directly accessible to overseas participants, while qualified foreign investors could trade 141 products. Wang also cited licensing arrangements for Chinese futures settlement prices covering pulp, soybean oil and natural rubber in Norway, Malaysia and Japan, extending their use overseas.

10. China and Qatar renew their local-currency swap agreement

The People’s Bank of China and Qatar Central Bank renewed their bilateral local-currency swap agreement on 14 October. Governors Pan Gongsheng and Sheikh Bandar bin Mohammed bin Saoud Al-Thani signed the extension in Bangkok. Pan also attended the fourth China–Gulf Cooperation Council central bank governors’ meeting, where participants discussed local-currency cooperation, cross-border payments, two-way investment and financial infrastructure connectivity.

The renewal maintains an arrangement originally signed in 2014 and extended in 2017 and 2021, continuing a framework intended to support bilateral trade and direct investment.