Kristian Rouz — Small and medium-sized Chinese banks are reporting a slowdown in their lending activity, coupled with a mounting volume of non-performing loans (NPLs) that could jeopardize financial stability in several Chinese provinces. © Wikimedia Commons via Peter SchmidUS-China Trade War Causes Airbus to Conceal Clients’ Identity – ReportsThe sluggish loan issues stem from Beijing’s efforts to rebalance the Chinese economy by reducing excess manufacturing capacity and reliance on exports, along with a crackdown on industrial air pollution. Subsequently, the majority of commercial borrowers across China’s provinces are cutting their liabilities, including by abstaining from taking out new loans. Meanwhile, some other companies are struggling due to the effects of excessive leverage coupled with murky exports forecasts — hence the rising share of delinquencies on the already existing loans. READ MORE: China May Boost Iranian Oil Purchases Once US Sanctions Step Into Force — Report © REUTERS / Joshua RobertsTrump Says China’s Currency ‘Dropping Like a Rock’Additionally, the central government in Beijing has recently ramped up its effort to boost the responsibility and accountability of financial managers across China. This comes as the country is facing a growing issue of so-called “shadow banking” — with high-risk companies unable to secure financing from an official lender resorting to informal ways of getting loans. The Communist Party of China has acknowledged the threat, and taken a dual approach to tackling the issue. Chinese financial authorities loosened bank reserve requirements on the… Read full this story
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