Economics
China’s Credit Engine Is Running Out of Gas
- Policy makers pledge neutral stance to counter financial risks
- HSBC sees tighter regulations, rising rates, liquidity squeeze
PBOC Plugs Gaps Amid Capital Outflow Pressure
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The People’s Bank of China faces a reckoning after revving its credit engine for years.
Three conditions suggest traditional financing and shadow banking are due to cool: Restrictions on property markets are poised to start weighing on mortgage issuance; bond market turbulence has spurred widespread cancellation of new corporate issues; and banks face more curbs on selling wealth-management products amid a regulatory tightening.