Shadow Banking Is Hurting China’s Banks — And That’s a Good Thing

"How can the world’s second-largest economy function at all? Enter shadow bankers - broadly defined as lenders outside the formal banking system. They include mom-and-pop lending operations, companies lending excess cash to each other, pawnshops, and recently tech companies running money market funds. Unlike shadow banking in the West, shadow banking in China is a necessity, helping build factories, mines, infrastructure projects, and other activities, and creating jobs."

http://blogs.cfainstitute.org/investor/2014/03/10/shadow-banking-is-hurting-chinas-banks-and-thats-a-good-thing/

Hidden debt must still be repaid

"Five or six years ago, a few skeptics first started pointing out that the credit dynamics underlying Chinese growth was creating an unsustainable increase in debt. This, they warned, would ultimately undermine the banking system and cause growth to collapse if it were not addressed in time.(...)

I agree that China is in a very different position than the US, but this isn’t necessarily a good thing. The main relevant difference is that because all the banks are perceived to be guaranteed by the central government, and Chinese households have a limited number of ways to save outside the banking system, it is unlikely that China will experience a system-wide bank run as long as the credibility of the guarantee survives, and runs on individual banks can be resolved by regulatory fiat (banks that receive deposits will be forced to lend to banks that lose deposits). We are not likely to see a Lehman-style crisis."

http://blog.mpettis.com/2013/10/hidden-debt-must-still-be-repayed/

China Is Ending Its "One-Child Policy" - Here Are The Implications

"Back in 1978, the Chinese politburo enacted the "one-child policy", whose main purpose was to "alleviate social, economic, and environmental problems" in China as a result of the soaring population. According to estimates, the policy prevented more than 250 million births between 1980 and 2000, and 400 million births from about 1979 to 2011. And while not applicable to everyone, in 2007 approximately 35.9% of China's population was subject to a one-child restriction."

"Such an unprecedented pace of aging poses big challenges to China’s pension system. Traditionally, Chinese families have largely relied on their children after their retirement. However, after a 30-year enforcement of the one-child policy, every only-child will need to support two parents and four grandparents, which is likely to be too much of a burden. The retirees will have to depend on the national pension system. China needs to quickly catch up its pension system coverage to ensure social security, as currently only about a third of the population is covered. Furthermore, how to finance the pension system remains a big question as China’s labor force shrinks."

http://www.zerohedge.com/news/2013-08-04/china-ending-its-one-child-policy-here-are-implications

China Cash Squeeze Seen Creating Vietnam-Size Credit Hole

"China’s money-market cash squeeze is likely to reduce credit growth this year by 750 billion yuan ($122 billion), an amount equivalent to the size of Vietnam’s economy, according to a Bloomberg News survey.

The number is the median estimate of 15 analysts, whose projections last week ranged from cuts of 20 billion yuan to 3 trillion yuan. The majority of respondents also said they approve of the government’s handling of the credit crunch and said the episode reinforces their expectations for policy reforms such as loosening controls on interest rates."

http://www.bloomberg.com/news/2013-07-07/china-cash-squeeze-seen-creating-vietnam-size-credit-hole.html

The Days Of The Super-Powered Chinese Economy Are Over

"The recent liquidity crunch, and its cause, illustrates some of the difficulties China's economy will face in the future. Over the last two years, and especially in 2013, mainland corporations with offshore affiliates had been borrowing money abroad, faking trade invoices to import the money disguised as export revenues, and profitably relending it as Chinese yuan. As China receives more dollars from exports and foreign investment than it spends on imports and Chinese investment abroad, the People's Bank of China, the central bank, is forced to buy those excess dollars to maintain the value of the yuan. It does this by borrowing yuan in the domestic markets. But because its borrowing cost is greater than the return it receives when it invests those dollars in low-earning U.S. Treasury bonds, the central bank loses money as its reserves expand."

Authored by Michael Pettis, originally posted at Foreign Policy.

http://www.zerohedge.com/news/2013-06-28/days-super-powered-chinese-economy-are-over

China: Rising risks of financial crisis

"China is displaying the same three symptoms that Japan, the US and parts of Europe all showed before suffering financial crises: a rapid build-up of leverage, elevated property prices and a decline in potential growth.

We delve into the financial risks facing China’s economy and find that the most vulnerable areas are local government financing vehicles, property developers, trust companies and credit guarantee companies. We also show how they are interlinked.

If the government acts this year with tighter policies – and our base case is that it will – we believe it can still avoid a systemic financial crisis. But that would come at a short-term cost of slower GDP growth, which we expect to average 7.3% in H2 2013.

As history has repeatedly shown, the slower the policy response to financial excesses, the greater the risk of a systemic financial crisis and the more challenging it will be to avoid a hard economic landing."

http://pl.scribd.com/doc/136192665/Nomura-2013-03-15-China-Risingrisks-of-Financial-Crisis?secret_password=1q074c8xtv813bbhw1kr#fullscreen

[Demonocracy.info] Global Financial Crisis: A World In Debt

Infografika od Demonocracy.info - dług wybranych państw (USA, Japonia, Kanada, Chiny, Wielka Brytania) zobrazowany za pomocą banknotów 100 USD. Polecam też przeglądnąć ich pozostałem infografiki.

http://demonocracy.info/infographics/usa/world_debt/world_debt.html

Nowa generacja chińskich przywódców

W razie posiadania wolnych 30 minut polecam wysłuchanie podcastu z rozmowy z prof. Bogdanem Góralczykiem (jest m.in. politologiem i sinologiem) o zmianie przywódców w Chinach. Bardzo ciekawe przedstawienie zarówno samej idei zmiany generacyjnej (to już piąta), jak i oczekiwań wobec nowych liderów.

Niestety nie mogę zamieścić bezpośredniego linka, opisywany podcast jest z dnia 15.03.2013.

http://www.tokfm.pl/Tokfm/0,131265.html

The roar of ice cracking

Artykuł o gospodarczym i ekonomicznym znaczeniu zmniejszania się powierzchni pokrywy lodowej w Arktyce. 

http://www.economist.com/news/international/21571127-will-asian-countries-consolidate-or-disrupt-arctic-stability-roar-ice-cracking

Chiński sektor bankowy szuka kasy gdzie może?

Problem, o którym mało się u nas słyszy. Chińskie banki szukają finansowania na rolowanie kiepskich dłużników:

"The nation's banks have been introducing new wealth management investment products at a blurring pace over the past year, dazzling upper-class clients with fat catalogues of high-yield investment opportunities".

A to już brzmi znajomo co nie? 

""Some products are expected to yield close to 10 percent," said one bank executive. "But how are banks getting access to so many high-return investment channels?" 

Pewnie to jakieś lokaty w złoto.

http://english.caixin.com/2011-07-21/100282196.html