The Chinese government is rapidly merging smaller banks in China as the banking system staggers along. China has been merging hundreds of rural banks this year in an attempt to stop the runs on these small banks.
China’s credit-driven development has finally stopped growing and is becoming a serious threat to the country’s and the world economy. In one week, 40 banks were closed in the country, and another 3,800 financial institutions are on the verge of bankruptcy. Most of them gave loans to manufacturers and local governments…
…The authors note that in recent years some banks have found that 40% of their portfolios are made up of non-performing loans.
Since most banks in China are state owned and the ones that are not, are owned by a majority by the state. I would say the banks that are failing, are exactly the ones China wants to fail. One more reason I do not invest in Chinese stocks.
This post is not about the banks specifically, but the deeper layer of weakness from CCP mal-investment up and down the line of government expenditure.
A major early part of the Belt & Road project was Gwadar Port in Pakistan
