The Unseen Revolution in Chinese Finances


In its report titled “The Unseen Revolution in Chinese Finances” US media Stratfor points out the silent revolutionary reform in Chinese finances. The report points out the large increase in lending but slow increase in investment, especially in the real estate sector where mortgage loans rose sharply but lending to developers for construction remains sluggish. The slowing fall of the issuance of bank acceptance that finances private manufacturers and the financing for repayment of old loans by new loans and debt-to-assets swaps all indicate coming substantial changes in China’s financial system.

That is, this blogger believe, a part of China’s reform towards a market-oriented model of economic growth. However, Stratfor says that the rising homeowner loans may give rise to dangerous risk and even a real estate bubble like those in the US in 2007 and 2008.

Source: Stratfor “The Unseen Revolution in Chinese Finances”. Only a summary is given here while the full text can be viewed at https://www.stratfor.com/analysis/unseen-revolution-chinese-finances.

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One Comment on “The Unseen Revolution in Chinese Finances”

  1. Steve says:

    Homeowners loans should not give rise to those subprime mortgage loans similar to the US 2008 financial crises, provided China’s financial lenders increase the borrower’s deposits by 40 to 60 % of the property’s value to maintain an Equity of the property and avoid lending to those with poor credit ratings.

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