China's shadow banking boom rings alarm bells

China's shadow banking boom rings alarm bells

Loan growth in China’s shadow banking system surged to near record levels in March, prompting fresh warnings that the country’s credit bubble is spinning out of control.

New loans jumped by $400bn, mostly in the less regulated pockets of the banking system. Trust loans have surged by 360pc over the past year.

Wang Yongping, head of China’s Commercial Real Estate Association, said there is a major bubble in office property across the country as developers switch strategy to evade curbs on residential homes, with extreme over-building in second tier cities or deep in the interior.

The vacancy rate in Shenyang has hit 24.3pc, with 55 giant projects still being built. “It will take at least five years to find enough tenants to fill the vacancies if no new project is approved,” he told Caixin magazine. Mr Wang said there had been wild construction in the western city of Chengdu, as well as Tianjin on the coast. “The supply is huge in these cities.”

Here is another Ambrose Evans-Pritchard offering from The Telegraph...this one from early Thursday evening BST...and I thank Roy Stephens once more for bringing it to our attention.