China’s banks worry about the speculative bubble

Zhang Jianguo.jpg

This year, China has been the one place in the world where almost anyone can get a loan. But now, it seems policy is about to change.

Zhang Jianguo, president of the 2nd largest bank, China Construction, has announced a 70% cut in H2 lending to Rmb 200bn ($29bn), “to avert a surge in bad debt”.

Zhang also confirmed the blog’s own worries about the speculative bubble that has developed, saying that “we noticed that some loans didn’t go into the real economy and feel that some industries are expanding too rapidly”.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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