Moreover, while a significant portion of the swelling

Moreover, while a significant portion of the swelling US debt belongs to the government sector that pays relatively low interest rates, in China, most of the debt in the business sector has grown. More than a quarter of all the economy’s debts are the product of “shadow banking” that has developed in China in the last decade, and a large part is concentrated in the real estate sector, both of which carry very high interest rates.

“Wild West” of shadow banking

Shadow Banking is a nickname for an entire world that connects financial institutions, including ordinary banks, companies, local government, and many households that engage in various types of loans. This system operates outside the formal banking system and under relatively limited regulation, although the Chinese government has recently made efforts to bring this huge sector under certain supervision.

Together, in this shadow banking world, millions of borrowers and lenders of various kinds operate with zero transparency, spreading great promises of return and security.

About $ 9 trillion of Chinese debt comes from shadow banking. Last year, the International Monetary Fund was warned to warn that the “Wild West” in the shadow banking market in China increases the risks, which are so high on the mountain of the country’s general debt. “The size and lack of transparency of all the connections and connections in the Chinese financial system pose a risk for stability,” the fund warned in its semi-annual report, adding that shadow banking creates a real risk to the financial system of the world’s second-largest economy. “Despite the government’s efforts in this regard, the vulnerability remains high, and the use of credit in risky investments remains widespread,” the fund’s report said.

belongs to the government sector that pays relatively low interest rates, in China, most of the debt in the business sector has grown. More than a quarter of all the economy’s debts are the product of “shadow banking” that has developed in China in the last decade, and a large part is concentrated in the real estate sector, both of which carry very high interest rates.

“Wild West” of shadow banking

Shadow Banking is a nickname for an entire world that connects financial institutions, including ordinary banks, companies, local government, and many households that engage in various types of loans. This system operates outside the formal banking system and under relatively limited regulation, although the Chinese government has recently made efforts to bring this huge sector under certain supervision.

Together, in this shadow banking world, millions of borrowers and lenders of various kinds operate with zero transparency, spreading great promises of return and security.

About $ 9 trillion of Chinese debt comes from shadow banking. Last year, the International Monetary Fund was warned to warn that the “Wild West” in the shadow banking market in China increases the risks, which are so high on the mountain of the country’s general debt. “The size and lack of transparency of all the connections and connections in the Chinese financial system pose a risk for stability,” the fund warned in its semi-annual report, adding that shadow banking creates a real risk to the financial system of the world’s second-largest economy. “Despite the government’s efforts in this regard, the vulnerability remains high, and the use of credit in risky investments remains widespread,” the fund’s report said.

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