Trust companies have been taking on much of the local debts haunting China’s economy. And most of their debts come from domestic investors in China, who bear most of the risk, when things go wrong, writes financial expert Sara Hsu in this weblog.
Tag Archives: Sara Hsu
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?
The party is over for Chinese banks, shadow banking expert +Sara Hsu concluded (together with co-author Andrew Collier) at the EastAsiaForum.com. Regulator can no longer turn a blind eye, as loans put local governments and private lenders into trouble.
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 China Speakers Bureau is happy to include Sara Hsu, offering our financial clients a unique insight in this unique feature. She will soon participate in one of our China Weekly Hangouts to discuss shadow banking in China.