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FX.co ★ China loses trillions of dollars on financial concerns

China loses trillions of dollars on financial concerns

China loses trillions of dollars on financial concerns

According to Bloomberg, growth in Chinese wealth management products (WMPs) has eased. The sphere is controlled by the country’s regulatory bodies because of potential threats to financial stability.

WMPs totaled 29.1 trillion yuan ($4.2 trillion) in March, a 18.6% increase from a year earlier. According to the China Banking Regulatory Commission (CBRC), the pace of growth for the same period in 2016 was 56%.

WMPs, which promise high returns, are viewed by many individual and corporate investors as a form of risk-free savings.

Over the past three years, WMPs have risen in price by almost three times and has taken a leading position in China's shadow banking sector. Regulatory authorities have begun to curb possible risks only recently.

CBRC chairman Guo Shuqing said he will coordinate with other financial authorities, including the central bank, to plug loopholes in regulations for financial products, including WMPs.

Meanwhile, domestic interbank assets at Chinese banks fell by 1.4 trillion yuan to 21.7 trillion yuan during the December-March period, while interbank liabilities decreased by 1.9 trillion yuan to 30.3 trillion yuan, the CBRC said.

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