China closes record 670 banks as Beijing tightens financial controls

China closed a record 670 banks during 2025 as Beijing moved to consolidate weaker rural lenders and contain mounting financial risks. The unprecedented wave of bank closures reflects efforts by Chinese authorities to address rising bad loans and manage the impact of slower economic growth on the financial system.

The consolidation primarily targeted smaller rural banking institutions, which have faced increasing pressure from asset quality deterioration. The move is part of a broader strategy to strengthen the stability of China's financial sector amid economic headwinds.