Growing concerns about excessive credit and lending in China, have lead the Chinese government to begin tightening up monetary policy and increasing the amount of reserves banks must hold, actions with are directed at decreasing the amount that banks can lend.
In addition, China's largest banks are taking independent steps to cut back on new loans, including complete bans on new yuan-valued loans at Bank of China Ltd, after record numbers of new loans were issued earlier this month.
Whether or not China is in a bubble is debatable, but it's clear much of the China growth story is dependent on the flow of easy credit, so these developments are likely to be a significant headwind for the Chinese economy going forward.
In addition, China's largest banks are taking independent steps to cut back on new loans, including complete bans on new yuan-valued loans at Bank of China Ltd, after record numbers of new loans were issued earlier this month.
Whether or not China is in a bubble is debatable, but it's clear much of the China growth story is dependent on the flow of easy credit, so these developments are likely to be a significant headwind for the Chinese economy going forward.
No comments:
Post a Comment