The Chinese banking sector is facing a serious crisis. In just one week, 40 banks disappeared, and the collapse of Jiangxi Bank of China has further deepened the sector’s problems. Experts warn that the situation could have severe consequences for the global economy.
Reports from China indicate the collapse of one of the banks. The portal renminbao.com published a report from outside the headquarters of the Jiangxi Bank, which concerned clients stormed over bankruptcy rumours. The bank had previously informed that its profits could drop by 30% due to customers’ loan repayment issues. …
Money is rushing into Chinese government bonds, sending their prices soaring and yields plunging to record lows as investors hunt for a safer alternative to the country’s ravaged real estate market and volatile stocks.
The yield on China’s onshore 10-year government bond, which is a benchmark for a wide range of interest rates, touched 2.18% Monday, the lowest since 2002 when records began. …
The property market is causing concerns. It was the driving force behind the economic boom, but now it’s dragging the economy down:
China’s property market accounts for around 25% of GDP. Analysts widely assumed that this, therefore, makes the sector too big to fail. They might be about to be proven wrong. The property market has contracted by as much as 7% year on year, causing real estate to have become a significant drag on the Chinese economy.
Chinese household save about 35% of their income but as things get worse this seems to be rising:
Traditionally Chinese saw housing as a safe way of saving but they are now switching their affection to gold:
As far as I know, Xi is letting the elite in China fail. He is not bailing out the bankers, but I am not 100% certain. If he is not that is because bankers do not run him. He runs them. His small-mindedness will drive his financial institutions to ruin. China’s industrials will not be far behind. He is destabilizing China.