China’s Liquidity Crunch
Joe Zhang, chairman of Wansui Micro Credit, says there is no problem with shadow banking in China; microcredit actually provides an invaluable service to small businesses. The key policy issue is how to make solid progress in liberalizing interest rates and ending financial repression.
China's liquidity crunch is just a “live stress test” on the financial system, and signals to the commercial banks and shadow finance entities that they must manage their liquidity positions, operations, and lending practices in a more prudent manner, according to Water Cheung, CFA.
In the second installment in our series of interviews with experts on China, Fraser Howie explains why he thinks recent actions by the PCOB will fall far short of resolving the country's banking problems.