The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Reality bites for China’s rickety local banks

Does the state of a smallish provincial lender signal the onset of a full-scale banking crisis in China?

Elliot-on-asia-column-banner-780.jpg



Is this the start, the moment where reality bites, and fear replaces ambivalence?

No, this is not about another made-in-China pandemic – though at the time of writing, a rather nasty pathogen, brewed in Wuhan, was threatening to go global.

Broadly, it is about the state of China’s banking system, for so long the driver and bedrock of Asia’s largest economy. Specifically, it bears a loaded question: does the state of a smallish provincial lender signal the onset of a full-scale banking crisis?

The institution in question is Baoshang Bank. Its problems began in 2017, when the billionaire Xiao Jianhua, a key investor, was abducted in his room at the Four Seasons Hotel in Hong Kong by Chinese agents and put on trial.

Regulators later took over the bank, citing a “serious credit risk”; a series of ratings downgrades followed.




Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to Euromoney.com and Asiamoney.com analysis and receive expertly-curated updates direct to your inbox.

 

Already a user?

Login now

 

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree