What is happening with China's economy? Chinese net new loans fell by ~50 billion Yuan in July, the first decline in 20 years. This is a key measure of lending at Chinese banks and a reflection of overall economic activity. By comparison, net new loans expanded by ~5 trillion Yuan at the start of the year. The drop was driven by net repayments from borrowers, suggesting that Chinese households and companies are becoming more hesitant to take on new debt. Economic momentum in China appears to be slowing.(The Kobeissi Letter)