The Henan banking and mortgage crises, and what they might tell us
Special points to highlight in this issue:
* The crisis affecting a rural banks in Henan and Anhui, followed shortly after by a threatened mortgage boycott for apartments whose construction has been delayed, has renewed concerns about China’s property and banking sectors. These have both become very visible events within China, and Beijing has put pressure on local governments to resolve them as quickly as possible.
* These won’t be so easy to resolve, however, because they are the consequence of much deeper financial imbalances that have been developing for over a decade. The best that can be done, at this point, is to bury the problems in local-government and bank balance sheets so as to postpone their resolutions until after this year’s Party Congress.
Now read on...
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