Bloomberg (February 7)
“The coronavirus outbreak hasn’t sapped China’s animal spirits. The private sector-heavy ChiNext Index soared to 3-year high this week.” Seems absurd, but the “epidemic is giving policymakers the opportunity to correct past mistakes without looking silly…. At long last, Beijing can toss away its misguided war on shadow banking and design a smarter one that gives the private sector some room to breathe.”
Tags: Animal spirits, China, ChiNext, Coronavirus, Correct, Epidemic, Outbreak, Policymakers, Private-sector, Shadow banking
Bloomberg (June 26)
“China is losing the war against shadow banking. Look beneath the headline numbers and you’ll see that activity is picking up, a sign of the economy’s overreliance on this opaque funding channel.” In the first quarter, “financing using trust assets climbed 4.4%” and the “proportion prone to default and repayment risks climbed to a record high of 90% from a year earlier.” Despite the talk of deleveraging, “what’s clear is that China needs its shadow banks now more than ever.”
Tags: China, Default, Deleveraging, Opaque funding, Overreliance, Repayment risks, Shadow banking, Trust assets
Institutional Investor (March 10)
“China’s red-hot growth inevitably has to cool given that it has already overbuilt and overborrowed. China’s debt load has exploded four-fold since 2007, largely on the back of shadow banking and a real estate boom.” China’s total debt load (estimated at 282% of GDP by McKinsey) now “tops debt loads in the U.S., Germany, Australia and other developed countries. China’s corporate debt amounts to 125 percent of GDP.”
Tags: Australia, Boom, China, Debt load, GDP, Germany, Growth, McKinsey, Overborrowed, Overbuilt, Real estate, Shadow banking, U.S.
