China is shifting property finance toward tighter project-level control. At the centre of five new measures is a lead-bank model that coordinates lending, places project funds under closed-loop management and links disbursement more closely to construction progress. This gives banks greater visibility over how funds are used while maintaining financing for viable projects.

Outside property, policy changes widened targeted credit support and strengthened the framework for investment products and cross-border payments. Fiscal subsidies now reach more SME, service-sector and consumer borrowing, while new private-fund disclosures and formula-based wealth-management benchmarks provide clearer information for investors. The PBOC also reported progress on Shubida, its cross-border e-CNY settlement platform, which has 26 signed direct participants.

Read more on the week’s key developments:

1. PBOC and NFRA issue five property-credit measures, adding lead-bank controls for development loans

On 28 August, the People’s Bank of China (PBOC) and National Financial Regulatory Administration (NFRA) issued the Opinions on Reforming and Improving Real Estate Credit Management to Accelerate the Construction of a New Real Estate Development Model. Five accompanying measures cover housing development loans, individual housing loans, commercial property financing, urban renewal and real estate trust financing. The new structure introduces lead-bank arrangements and closed-loop fund management for development loans, while allowing greater flexibility in individual mortgage tenors. The China Securities Regulatory Commission issued supporting guidance on capital-market financing, while housing authorities are promoting a gradual move toward completed-home sales.

Bringing five areas of property finance under one project-based structure gives banks a more consistent approach to development risk. Lead banks will coordinate lenders and track fund use against construction progress, increasing due-diligence requirements while limiting opportunities for diversion. For homebuyers, tighter control of project funds provides stronger protection against non-delivery, although consistent enforcement across banks and local authorities remains important.

2. China’s Big Six banks implement expanded SME and consumer loan subsidies

By 27 August, China’s six major state-owned banks had issued implementation details for an expanded fiscal interest-subsidy programme covering SME working-capital loans, service-sector business loans, personal consumption loans and credit-card instalments. Under a 17 August policy notice, eligible working-capital loans issued from 1 August receive an annual subsidy of one percentage point for up to two years. The maximum eligible SME loan amount per borrower at each institution increased from RMB 50 million ($6.9 million) to RMB 75 million ($10.4 million), while the limit for service-sector operators doubled to RMB 20 million ($2.8 million). The annual subsidy cap for each consumer at an individual institution rose from RMB 3,000 ($417) to RMB 5,000 ($694).

China is using fiscal funds through existing bank channels to reduce financing costs while leaving underwriting and credit risk with lenders. Extending eligibility to working-capital loans directs more support toward SMEs’ day-to-day needs, including inventories, wages and supplier payments. A larger network of participating banks also broadens delivery beyond the major state-owned institutions.

3. China’s private investment fund disclosure rules take effect on 1 September

The Measures for the Supervision and Administration of Information Disclosure of Private Investment Funds took effect on 1 September, establishing more detailed disclosure responsibilities for private fund managers and custodians. The rules cover maximum drawdown, liquidity conditions and the underlying assets of funds invested through multi-layered structures. They also clarify the responsibilities of market participants and strengthen penalties for disclosure violations.

Standardised reporting gives investors and regulators a more consistent view of drawdowns, liquidity and underlying exposures. Managers of complex and multi-layered funds will need stronger data, valuation and reporting systems, increasing compliance requirements. Investment risk remains, but incomplete or inaccurate disclosure becomes easier to identify and investigate.

4. More than 3,000 Chinese bank wealth products to adopt formula-based performance benchmarks

By 25 August, more than 3,000 bank wealth-management products had replaced fixed performance benchmarks or numerical ranges with formulas linked to deposit rates, bond indices and other market references. Institutions making the change included the wealth-management subsidiaries of CMB, ICBC, ABC, BOC, PSBC, Ping An Bank, BoCom and Hua Xia Bank. The adjustments were introduced ahead of new disclosure requirements taking effect on 1 September.

The benchmark shift advances the industry’s transition toward net-value products by weakening the perception of an implied return guarantee. Market-linked formulas also allow benchmarks to adjust with rates and asset prices. However, they can be harder for retail investors to interpret and may make products less directly comparable, increasing the need for clear explanations from wealth managers.

5. PBOC highlights Shubida as China develops cross-border e-CNY infrastructure

At the 15th China Payment and Clearing Forum on 27 August, PBOC Vice Governor Lu Lei provided an update on China’s cross-border payment infrastructure. Cross-border e-CNY Transfer Services (CBETS), a digital-renminbi settlement platform known as Shubida, has been operational since June. Twenty-six domestic and overseas financial institutions have signed as direct participants, including ICBC (Asia), BOC Hong Kong, overseas branches of major Chinese banks and Standard Chartered China. Lu also said the mainland-Hong Kong payment link was operating steadily, connections with the UAE and other markets were advancing and the cross-border QR gateway had extended retail-payment connectivity in both directions.

Single-point access through Hong Kong can shorten payment chains and reduce the cost of establishing separate connections between participating institutions. Shubida also supports round-the-clock digital-renminbi payments across remittances, trade and investment settlements. Its 26 direct participants provide an initial institutional base, although current transaction values were not disclosed at the forum.

6. China Merchants Bank expands technology finance to all 44 branches as AI use cases rise 62%

China Merchants Bank (CMB) has established technology-finance departments across all 44 domestic branches, supported by 20 priority branches and 150 specialist sub-branches, 50 more than previously reported. Its technology-company client base reached 378,300. CMB also reported 1,386 AI-enabled use cases, up 62% from the end of 2025, and 256 specialised models, up 40%. The bank estimates that its AI applications contributed the equivalent of 13.88 million labour hours, while its board approved an AI computing plan covering 2027 and 2028. Separately, wealth-management revenue rose 18.44% and retail assets under management reached RMB 18.44 trillion ($2.56 trillion).

Placing technology-finance functions in all 44 domestic branches turns a specialist business into a bank-wide coverage model, while priority branches and specialist sub-branches retain capacity for more complex clients. CMB’s AI figures show extensive internal deployment, although its estimated labour-hour contribution does not establish corresponding gains in revenue, credit performance or customer outcomes.

7. China’s Big Six banks report H1 revenue and profit growth despite margin pressure

ICBC, ABC, BOC, CCB, BoCom and PSBC all reported year-on-year growth in revenue and attributable net profit for H1 2026. Their combined attributable net profit reached RMB 712.6 billion ($106 billion), up 4.41%, while revenue exceeded RMB 2 trillion ($297.6 billion), up approximately 9.4%. Reported non-performing loan ratios ranged from 1% to 1.3%, while provision coverage ranged from 200.85% to 290.1%. Lending to manufacturing, inclusive SMEs and green projects generally grew faster than the banks’ overall loan books.

All six returned to simultaneous revenue and profit growth for the first time since 2022. ABC led revenue growth at 11.2%, while BOC recorded the fastest attributable profit growth at 5.1%. Balance-sheet expansion, lower deposit costs, non-interest income and cost controls supported earnings, although the mix differed by bank. Lower funding costs offered some relief, but soft loan pricing and demand continue to constrain margins, while property and local-government-related exposures remain key risk-management priorities.

8. Five listed Chinese insurers report 78.1% H1 profit growth on investment gains

China Life, Ping An, PICC, China Pacific and New China Life reported combined attributable net profit of RMB 317.4 billion ($44.1 billion) in H1 2026, up 78.1% year-on-year. China Life recorded RMB 134.4 billion ($18.7 billion), an increase of 228.6%, while Ping An posted RMB 92.6 billion ($12.9 billion), up 36.1%. Higher equity allocations and the recovery in the A-share market contributed substantially to the increase.

Investment gains accounted for much of the sharp increase in profits, making new business value and underwriting margins more durable indicators of operating progress. Higher equity allocations increase returns when markets rise but also make earnings more sensitive to reversals. The headline profit increase therefore does not represent an equivalent improvement in core insurance performance.

9. Shanghai Pudong Development Bank’s net interest margin rises two basis points as H1 earnings growth accelerates

Shanghai Pudong Development Bank (SPD Bank) reported H1 operating revenue of RMB 93.8 billion ($13 billion), up 3.55% year-on-year, and attributable net profit of RMB 31 billion ($4.3 billion), up 4.08%. Both growth rates accelerated from the first quarter. Total assets reached RMB 10.4 trillion ($1.45 trillion), while the cost-to-income ratio declined to 22.52%. Its net interest margin reached 1.43%, up two basis points, and its non-performing loan ratio declined. Assets under custody and related supervision rose 7.62% to RMB 21.75 trillion ($3.02 trillion).

SPD Bank’s recovery is most visible in its two-basis-point improvement in net interest margin, lower cost ratio and better asset quality. Growth in custody assets expands its base for fee-generating services, although the bank did not disclose corresponding custody revenue. The figures point to improving operating momentum within SPD Bank without supporting a wider conclusion about the joint-stock banking sector.

10. PBOC uses overnight reverse repos to manage August month-end liquidity

Between 27 August and 1 September, the PBOC announced overnight reverse repo operations with daily ceilings of up to RMB 600 billion ($83.3 billion), following a similar sequence in mid-August. The operations coincided with government-bond settlements, month-end funding requirements and other temporary liquidity pressures. Their size was adjusted daily, while DR007 remained broadly aligned with the policy rate.

Overnight repos give the PBOC greater control over how long liquidity remains in the banking system. They are suited to temporary pressures from government-bond settlements and month-end funding needs because the funds expire quickly once those pressures ease. Their use points to more precise liquidity management and provides little evidence of a broader change in monetary-policy direction.

What to watch

CITIC Limited’s 2026 interim results on 4 September; the 27th China International Optoelectronic Expo from 6 September; August CPI, PPI and trade data on 9 September; and the China International Fair for Investment and Trade in Xiamen from 8 to 11 September.