China’s shadow banking activities continue to slow

Shadow banking activities in China have continued to slow, according to the latest quarterly monitoring report from Moody’s Corporation, The Paper reported.

At the end of 2017, China’s shadow banking assets reached 65.6 trillion yuan (US$10.12 trillion), while at the end of 2016 it was recorded as 64.5 trillion yuan, an increase of only 1.7%, almost stagnant compared to the previous period.

Also, GDP growth has exceeded the growth of shadow bank assets for the first time since 2012. The ratio of shadow banking assets to GDP has dropped from the peak of 86.7% in 2016 to 79.3% in 2017.

The recent decline in the growth rate of social financing is also affected by the substantial slowdown in core shadow banking activities, including entrusted loans, trust loans and undiscounted bankers acceptances.

In the first quarter, both entrusted loans and undiscounted bankers acceptances showed negative growth. Although trust loans continued to grow, the growth rate fell to its lowest level since March 2017.

From the end of 2016, regulators have started to rectify shadow banking activities in China.

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