These are shadow banking (40%-70% of GDP); real estate bubble as well as high public and corporate debt (about 255% of GDP at end 2015). In fact, Bank for International Settlements (BIS) has warned that China’s excessive credit growth is signalling an increasing risk of a banking crisis. “In its enthusiasm to address the problem of financial imbalances, a policy miscalibration by the government could lead to financial market chaos. “This can help to address the risk to China and global financial systems arising from the growth in shadow banking,’’ added Suhaimi. Columnist Yap Leng Kuen reckons that shadow banking needs to come out of the shadows quite soon.

Source: The Star February 26, 2017 21:56 UTC