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China's Shadow Banking Boom Rings Alarm Bells

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http://www.telegraph.co.uk/finance/china-business/9988213/Chinas-shadow-banking-boom-rings-alarm-bells.html

New loans jumped by $400bn, mostly in the less regulated pockets of the banking system. Trust loans have surged by 360pc over the past year.

Wang Yongping, head of China’s Commercial Real Estate Association, said there is a major bubble in office property across the country as developers switch strategy to evade curbs on residential homes, with extreme over-building in second tier cities or deep in the interior.

The vacancy rate in Shenyang has hit 24.3pc, with 55 giant projects still being built. “It will take at least five years to find enough tenants to fill the vacancies if no new project is approved,” he told Caixin magazine. Mr Wang said there had been wild construction in the western city of Chengdu, as well as Tianjin on the coast. “The supply is huge in these cities.”

The gung-ho mayor of Chengdu is explicitly aiming to match and surpass the massive scale of building seen in Shanghai, hoping to turn the Sichuan capital into one of the world's top cities by the end of the decade.

When China bursts it's going to be very interesting to see how they handle it politically.

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When China bursts it's going to be very interesting to see how they handle it politically.

To the average Chinese person capitalism is like the universe- ever expanding at an accelerating rate- no one ever told them otherwise.

So if a big bust comes they will assume it's an error on the part of their leaders, rather than a bug/feature of the Free Market system.

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  • 242 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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