This is a follow-up report to update our broad figures on how the Chinese financial system has developed since last year: How big is the financial economy? How fast has it grown? And what is the outlook for the coming 12-24 months?

The Chinese financial system set a new all-time high in 2025 with gross assets reaching 554% of GDP. Unlike in 2024, the main marginal driver was the banking system rather than non-bank financial institutions (NBFIs), with China's "big six" banks accounting for the largest single share of the increase despite a contraction in outstanding household loans.

The composition of growth shifted in 2025. Bank credit expansion broadened led by the big six, while NBFI growth continued but at a noticeably slower pace than 2024's surge. Within NBFIs, growth narrowed to just two segments, i.e., insurance and trust companies, while securities companies, fund management and finance companies all went into reverse.

Trust sector grew further in 2025 but the pace of expansion slowed markedly compared to the prior year. This suggests the shift toward passive, fee-light trust structures we flagged last year may be approaching a plateau rather than continuing to accelerate.

Deposit dynamics were more mixed last year than the sharp 2024 reversal suggested. Deposit formation recovered somewhat in 2025 though it remains well below the 2022-23 pace. Meanwhile loan growth remained strong, with the system loan-to-deposit ratio holding steady despite the stronger deposit growth. Rather than the abrupt deleveraging shock we flagged as a risk last year, this looks more like a slower, grinding tightening of funding constraints.