Seeking Alpha

Increase in Chinese lending raises alarm bells

  • China's aggregate financing grew for the first time in four months in August, rising to 1.57T yuan ($257B) from a 21-month low of 808.8B yuan in July and topping consensus of 950B yuan.
  • Growth in bankers' acceptance bills and entrusted loans indicate a pick-up in shadow banking, which has caused so much nervousness over recent months.
  • While the increase in financing may be helping the economy, says SocGen economist Yao Wei, it only "adds to the downside risk," as Chinese corporations and local governments become ever more indebted.
  • ETFs - Stocks: FXI, GXC, PGJ, YAO, FCHI, PEK, CAF, YXI, XPP, FXP, MCHI, YINN, YANG, TCHI, CHXF, KFYP, HAO, ECNS. Bonds: DSUM, CHLC. Currency: CNY, CYB, FXCH
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Comments (3)
  • samuel_liu
    , contributor
    Comments (2798) | Send Message
     
    lending is for state-run organisations right?
    11 Sep 2013, 05:19 AM Reply Like
  • StayCool
    , contributor
    Comments (144) | Send Message
     
    China is a veritable house of cards with respect to its shadow banking. The only question is how far and deep will the damage go when the crisis hits. I have absolutely no confidence in the Chinese government's ability to manage their way through this to a 'soft landing'. I am with Jim Chanos - stay away!!
    11 Sep 2013, 07:43 AM Reply Like
  • Brian Bobbitt
    , contributor
    Comments (2061) | Send Message
     
    I too, do not invest in China anymore. BUT, don't let the dragon of the east fool you. It is a vibrant place and demand among its citizens is among the highest in the world, and they have plenty of citizens. I was supposed to go back to China a coupla years ago, and due to wife's illness did not. I may put it back on the agenda, depending on how things go with her, and the market. But, still, I stay away from it. Too much smoke comin' from the dragon. Can't be sure if it is industrial smoke from factories or from the magic cauldron of their government.

     

    Capt. Brian
    The Lost Navigator
    11 Sep 2013, 01:39 PM Reply Like
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