How China Is Keeping Its Financial System From Collapsing, In One Chart

Jon Alternative Media, Banking, Blogosphere, Economy, Government, Market Commentary

Overnight, Bloomberg has posted the latest article in a long-running series of warnings about the dangers of China’s, now $9 trillion – and fast approaching 100% of GDP – shadow banking system, which it says is playing a “game of chicken with investors”, and which boils down to the following: if there is a high profile failure of any one of the countless wealth management product, or WMPs, which comprise the vast majority of China’s shadow banking system, and if the government does not bail it out – as it has threatened on several occasions to do – there may be a mass “run on the shadow bank”, resulting in unknown adverse consequences for China’s broader financial markets.
Indicatively, WMPs comprise the biggest category of AMPs, with assets of around 29.1 trillion yuan ($4.2 trillion) at the end of December, according to the CBRC. They’re also the products most widely viewed as risk free by Chinese savers.

This post was published at Zero Hedge on Apr 11, 2017.