Excess Cash Piles Up in China Havens Instead of Flowing Into Real Economy
- Net sales of certificates of deposit fell to lowest since 2020
- Authorities to maintain liquidity at “reasonably ample” levels
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China’s top leadership is committing to ample liquidity as the nation contends with a slowdown. So far, a lot of that cash is sitting in the financial system instead of being transmitted to the real economy.
Cash-rich lenders and funds have been using the money to buy policy bank bonds and high-grade corporate debt, as well as the dollar as the growing interest-rate differential between China and the US boosts the currency’s appeal, according to data compiled by Bloomberg.