A narrow escape from default of the USD495 million of the trust fund, organized by the ICBC for the Shanxi Zhenfu Energy Group in the last week of January, is not the end of the troubles for other trust funds, writes shadow banking expert Sara Hsu in The Diplomat. “A liquidity crisis might expose more problems.”
January 31 is going to be a major test for the shadow banking in China, as a 3 billion RMB fund matures, without support of the larger banks. One of the main victims could be China´s SME, who had to turn to shadow banking as officials refused them funding, writes financial specialist Sara Hsu in the South China Morning Post.
The reforms announced after the Third Plenum might not offer a enough to guarantee financial stability in China, writes financial specialist Sara Hsu in Triple Crisis. China’s financial authorities should focus on shadow banking, in stead of monetary tightening that could slow down economic growth.
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.