China banking woes mount as growth slows and more lockdowns loom
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China banking woes mount as growth slows and more lockdowns loom

Xi Jinping wants a smooth path to his re-appointment as president in November. But his zero-Covid policy, slowing growth and bank runs in central China mean that path is looking increasingly bumpy.

COVID-19 outbreak in Shanghai

“For the rest of the year, everything will be carefully managed and manicured. The 20th Congress is just too important.”

George Magnus – referring here to an upcoming November 2022 meeting of the Chinese Communist Party, where president Xi Jinping should be anointed president for an unprecedented third term in office – knows China better than most.

A former chief economist for UBS Investment Bank, Magnus is also an associate at Oxford University’s China Centre and author of ‘Red flags: Why Xi’s China is in jeopardy’.

George Magnus, UBS Investment Bank.jpg
George Magnus, UBS Investment Bank | Photo: Justin Canning

In normal conditions, Magnus’s assessment would be a dead cert.

Xi is setting himself up as president-for-life, Magnus says, which means there must be no nasty surprises in the months ahead. So no pandemic spikes in big rich cities or the poor hinterland; no growth fears or bank runs; no social instability; and absolutely no flirting with recession.

Oh, hang on a minute.

Actually, China faces all those issues in capital letters – and more besides.

Amid the myriad problems facing developed nations – from slow growth to high prices to supply-chain bottlenecks – China’s economic woes have largely gone unnoticed.

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