Current tight liquidity within China’s financial system is due to regulations aimed at clamping down on the thriving Rmb-dollar carry trade and limiting banks’ investments in trusts, with the central bank extremely reluctant to intervene to alleviate the liquidity crunch. Mounting pressure may force it to act against its will, however.
Update alerts
Trusts: postponing the day of reckoning
14 Jun
The latest data indicates that Document 8 – an official regulation that seeks to reduce risks in China’s massive shadow financial system – has not had an impact on issuance of trusts.
Liquidity crunch for underground banks?
28 May
China’s underground banks face a challenging 2013. Research by China Confidential in late April found that 35% of investors who have placed money with the underground banks plan to pull out funds in the coming year.
Follow the Money – May 16 May
The end of the bull run? 16 Apr
QDII2 – Just talk, for now 21 Feb
Back into underground banks 15 Dec
Bond bears at bay 15 May
Fast convertibles 21 Feb
Banks to the fore 18 Jan
Trading in RMB grows
As China continues to internationalise its currency, a small but growing number of multinationals are now using renminbi in cross-border trade.
Denise Law is a researcher for Renminbi Compass in Hong Kong. (4m 13sec)
Report archive
CHINA CONFIDENTIAL
An integrated research service from the Financial Times that provides premium, exclusive analysis and predictions on China investment themes.
Using a dedicated FT team of specialists in China and the UK, it taps Chinese sources from the grassroots to the political elite to forecast key trends and issues. It conducts proprietary research to supply its own insights into industry trends and consumer sentiment. By filtering the work of the best Chinese analysts and academics, it keeps you current on key debates as they unfold inside mainland China. Its broad aim is to help the professional investor navigate through the Chinese investment landscape.
