Can the rest of the globe expand if China is struggling? China’s $138 Billion Shadow Bank
On several occasions over the last two decades, a big release of credit in China has raised boats across the world.
John Authers Bloomberg 16 August 2023
China’s $138 Billion Shadow Bank
The under-the-radar group, Zhongzhi Enterprise Group, risks becoming the latest Chinese financial giant to fail.
This is “the one that everyone knew was going to blow up,” said Jason Hsu, chief investment officer at Rayliant Global Advisors.
Bloomberg News 15 augusti 2023
Turmoil at Zhongzhi sparks alarm over China’s $3tn shadow financing industry
Zhongrong had failed to repay trust products, which offer savers and companies higher returns than traditional banks.
For Zhang at Gavekal, debt troubles in the real estate sector will “inevitably surface in other places, including at commercial banks”, if the “market slump continues”.
“If that happens,” he added, “Zhongzhi may yet come to be seen as the canary in the coal mine.”
The Economist 17 August 2023
https://www.ft.com/content/d150a3c9-4d0b-4d46-b856-153a253d9dbc
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