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在线翻译:
szdaily -> Business
Shadow banking ‘falls in proportion to GDP’
    2017-November-7  08:53    Shenzhen Daily

CHINA’S shadow banking activity stopped growing in the first half of 2017 and declined relative to gross domestic product (GDP) for the first time in five years, Moody’s Investors Service said yesterday.

China’s shadow banking assets were equivalent to 82.6 percent of gross domestic product in the January-June period, declining from a peak of 86.5 percent in 2016, according to the Moody’s report.

Moody’s said it was the first time since 2012 that China’s nominal GDP grew faster than its shadow banking assets.

A fall in issuance of higher risk instruments such as wealth management products and non-bank financial institutions’ asset management plans contributed to the shadow banking slowdown, according to Moody’s, indicating China’s recent regulatory measures are proving to be effective.

China is expected to continue to rein in shadow banking and address some of the key systemic imbalances, Moody’s said.

Michael Taylor, Moody’s chief credit officer for the Asia-Pacific region, warned that “core shadow banking activity,” including entrusted loans, trust loans, and undiscounted bankers’ acceptances, continued to expand.

“The ability of the formal system to replace shadow credit faces limits, and bank credit may not prove a perfect substitute for shadow credit,” Moody’s said.

Government, household and corporate debt accounts for up to about 260 percent of the economy, according to Bloomberg Intelligence.

China has vowed to crack down on illicit banking activities, tightening control of trust companies, insurers and increasing checks on banks’ off-balance sheet wealth management products — a key component of shadow banking credit, and risk lending, among other things.

It also plans to introduce 20 sets of new regulations to increase supervision on shadow banking, a senior banking regulator official said in August.

China’s financial system is becoming significantly more vulnerable due to high leverage, according to central bank governor Zhou Xiaochuan, who has made a series of direct warnings in recent weeks about China’s debt levels.

Latent risks are accumulating, including some that are “hidden, complex, sudden, contagious and hazardous,” even as the overall health of the financial system remains good, Zhou wrote in an article published on the People’s Bank of China’s website late Saturday.

The nation should toughen regulation and let markets serve the real economy better, according to Zhou. The government should also open up markets by relaxing capital controls and reducing restrictions on non-Chinese financial institutions that want to operate on the mainland, he wrote.(SD-Agencies)

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