China loan growth slows to new normal, says PBOC chief

China's loan growth has settled into a slower pace that officials now call the new normal, PBOC Governor Pan Gongsheng said. Weakening demand from the property sector and local governments is cutting credit needs faster than emerging industries can fill the gap. In August, new bank lending rose after July's record drop, but the increase fell short of what analysts expected. Household borrowing stayed weak and firms continued to pull back on loans, keeping overall credit growth muted. Pan noted that the slowdown reflects the combined impact of a struggling real‑estate market and tighter fiscal spending by local authorities. He added that the credit squeeze could linger unless demand from new sectors picks up. The central bank remains watchful of the balance between reduced demand and any rebound in emerging industries.