more evergrande fallout or something else?
They’re trying to authoritarian their way out of a massive speculation bubble.
I don’t think it will work, unless you can will away a black hole. Debt is a kind of gravity.
You mean if you can pick up enough speed in the transverse direction you can circle around it and never hit it?
Evergrande was not a triggering event, it was an inevitable consequence. The CCP’s fiscal policy has driven “growth at all costs” for over 40 years now and they are running out of free runway. Their “private” sector (a bit of a misnomer considering how government-driven basically every company is over there) acquiesced to these government demands for growth, especially in real estate, long after traditional market fundamentals were saying to slow down, and now those “private” companies are saddled with investments without any way to make money off them post-pandemic. And their markets have realized that before the party did.
The party is only just now waking up to the fact that they can’t keep hitting GDP growth targets by pumping stimulus into their businesses and that their economy needs to begin maturing into a more stable form. We will not see a real “collapse” like some doomsday fans love to parrot, but there is a very large correction about to happen to their economic projections, in both GDP and demographics.
This is the best summary I could come up with:
Beijing is tackling high-risk financial lenders by enacting a major consolidation wave that will merge hundreds of dealers across the $6.7 trillion sector, Bloomberg reported.
It’s a concern Beijing desperately needs to tackle, as mounting domestic debt has applied broad downside pressure on China’s economy over the last few years.
At the end of 2022, the bad-loan ratio in the rural cooperative bank system stood at 3.48%, more than double that of China’s entire financial sector.
For instance, these smaller cooperatives have been cited as putting profit ahead of their policy duties, such as by offering loans beyond their rural and agricultural areas.
In 2022, four local banks in the Henan province colluded with a stakeholder to attract billions of yuan through online platforms, freezing hundreds of people out of their savings and triggering protests.
But Beijing will have to be mindful of its approach, as its previous merger enforcement didn’t necessarily lead to improved bad-loan ratios, Bloomberg noted.
The original article contains 255 words, the summary contains 159 words. Saved 38%. I’m a bot and I’m open source!
