Most Western media did not pay attention when China´s central bank entered the interbank market at the last week of 2013. Wrong, says financial analyst Michael Justin Lee in ChinaUSFocus. ” It means China continues to ease on down the road to capitalism. It’s a rocky road but the only road we’d want China to be on”.
The bears are out in full force again, as the growing burden of governmental debts is possibly pulling the Chinese economy down. Some media even suggested China is heading for its own Lehman debacle. Is that true, of just part of the spinning inevitable before the Third Plenum is gathering in November for its key meeting on China’s reform. Can and will the government bail out the banks and local governments?
Shadow banking covers about 25% of China’s financial industry, and poses a threat to the country’s future. Shadow banking expert Sara Hsu fears that these riskier ways of getting finance, shadow banking might collapse and wipe away the savings of many Chinese, if the government does not step in, she tells at the China Weekly Hangout.
The central government is actively going after its major state-owned banks for ‘violations’ in its lending policies, indicating concern about the direction of China’s financial system. China is not yet facing a Lehman moment, tells business analyst Shaun Rein the BBC, but action is needed.
In a surprise move China’s financial authorities decided last week to abandon their tight money lending policy and losend the reigns for its banks again. Wrong policy, says business analyst Shaun Rein in CNBC, who has been praising the government handling of inflation and overspending in the past.