Finance
Trouble Is Brewing in the Darkest Corner of China’s Shadow Banking
- Losses feared in products sold by independent wealth managers
- Regulators have taken notice, but oversight is still minimal
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Analysts on the lookout for China’s next financial shock are training their sights on the least regulated corner of the nation’s sprawling shadow banking system.
Their concern centers on so-called independent wealth managers, which have expanded rapidly in recent years by selling high-yield products to affluent investors. Largely untouched by a government clampdown on nearly every other form of non-bank financing, the industry has grown from obscurity into a major source of funding for cash-strapped Chinese companies.