pldragon

Is There Tightness in China's Money Market?

The story about the Yiwu boss is definitely not surprising at all.
I also believe there will be numerous defaults before the end of 2008.
Well, since they affect "private banking", the government can pretend that it is not its business...
But because usually, private banking involves thousands of lenders, the risk of social and polititcal instability is greatly increased.

The second story is truly astounding for me: I don't doubt for a second that it is true, but I have a question: All of the big 4 banks are quasi-national banks, I mean not private ones: In case of liquidity crunch like the one mentionned, the government would not step in ?

Sure, I do understand that interventionism would run counter to their desire to reduce the volume of money available for credit , and therefore to the fight against inflation and hot money...
But what about the confidence of the public in banks? or will chinese people soon start to buy gold frantically like in Vietnam ?