Bot real estate prices and A-shares in China keep on getting investors attention, but as the country prepares for stress tests of their banks, Shaun Rein expects the government will be able to channel fears about the debts of central and local governments, he tells Bloomberg TV.
Rein foresees a soft lending for the real estate as sales dropped 70 percent over the past few months, indicating consumers are not taking too high risks. Total government debts is at 42 percent of China’s GDP, much less than in some of the developed countries, putting it in a good position to deal with those debts with huge problems for the banks. Rein expects no problems as China will expose its banks to the stress tests earlier conducted in the US and Europe.
More at Bloomberg.