China in a nutshell – Debts mount, their settlement slows – cash flow dwindles, balance sheets expand. Narrow money badly lags broader aggregates.

Sharing is Caring!

via @CantillonCH:

China’s Banks Have a Hidden Wave of Bad Debt

Factor in the amount of soured loans they stripped from their balance sheets last year, and the situation looks a lot more troubling.

China’s banks may have a flood of bad loans waiting in the wings. Not that you’d know it from looking at official levels for 2018, which suggest the problem was broadly contained. The reality is that newly soured debt was coming through the front door as fast as banks could shovel it out the back.

Authorities worked hard to restrain financial-system leverage in 2018. Outstanding credit increased a relatively modest 10 percent, with growth in new loans falling 14 percent. The government accomplished this primarily by tightening restrictions on shadow banking and moving that lending into the formal banking system, which recorded a 13 percent jump in new loans last year.

 

China’s $6.4 trillion stock market is controlled mostly by insiders: founders, management and parent holding companies

See also  The 2008 BANKING CRISIS in a nutshell.
See also  China shuts down #Taishan nuclear reactor for "maintenance" over damaged fuel rods (AFP)

Billions in cash from abroad won’t move the needle. Look instead at what company management is doing.

 

768 views

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.