Shanghai’s Q1 Social Financing Rises, Corporate Borrowing Costs Hit Record Low

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Total social financing in Shanghai experienced a faster growth rate in the first quarter compared to the previous year, with corporate financing costs hitting a record low in March—better aligning with the financing needs of the real economy.

Over the first three months of the year, Shanghai’s total social financing increased by approximately 474.3 billion yuan (roughly $69.4 billion), which is about 13.8 billion yuan ($2 billion) more than the same period last year, according to recent data from the Shanghai branch of the People’s Bank of China.

This year, the city has accelerated efforts to improve transparency in corporate borrowing costs. Financial institutions are now required to disclose all borrowing expenses, including both interest and non-interest charges, when providing loans to help businesses access more affordable financing options. Twenty-three banks in Shanghai are actively participating in this initiative.

As a result, the average interest rate on newly issued corporate loans in Shanghai fell to approximately 2.63% in March—down from 2.85% a year earlier—setting a new historic low. For small and micro-enterprise loans, the average rate decreased to about 2.87%, down from 3.17%, according to central bank data.

Besides lowering borrowing costs, Shanghai has also refined its credit structure by emphasizing support for technological innovation, small and micro enterprises, and cross-border financing.

By the end of March, the total outstanding loans in Shanghai—both domestic and foreign currency—reached roughly 13.5 trillion yuan ($2 trillion), reflecting a 6% increase from the previous year. Notably, loans to the information technology and scientific research service sectors jumped 41% and 28%, respectively, while loans to small and micro enterprises rose by 13%. The city’s offshore loan balance also grew by 22%.

Shanghai’s savings are expanding rapidly as well. The total deposits in domestic and foreign currencies hit approximately 24.9 trillion yuan ($3.6 trillion) at the end of the first quarter—a 13% rise from a year earlier. Household deposits increased by 8%, and deposits from non-financial firms grew by 6%.