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China Is Playing a $9 Trillion Game of Chicken With Savers

  • WMPs have proliferated thanks to implicit state guarantees
  • Government wants to reduce moral hazard, but it won’t be easy
Chinese day traders watch the stock tickers on a board at a brokerage firm in Beijing, China.
Photographer: Kevin Frayer/Getty Images
By
Bloomberg News
Updated on

Like many individual investors in China, Yang Mo has no idea what’s in the wealth management products that make up a big chunk of her net worth.

She says there’s really no point in finding out. Sure, WMPs invest in all kinds of risky assets, but the government would never let a big one fail, she says.