For China, Kicking a $9 Trillion Habit Is Tough Work
Shadow-banking activity is picking up, a sign the economy remains overreliant on this opaque funding channel despite Beijing’s efforts.
The future of shadow banking is hazy.
Photographer: Qilai Shen/BloombergSo much for deleveraging. China’s biggest shadow lenders are back.
On the surface, it may look like regulators have managed to shrink the role of trust companies, after a wide-ranging, months-long crackdown on China’s financial underbelly. Assets under management at these lightly regulated non-bank financial firms – a hybrid of private equity, asset management and lending – posted their first annual decline last year. Business revenue in the first quarter fell 5% from a year earlier. Broad shadow-banking assets fell 1.2 trillion yuan ($170 billion) in the first three months of this year.