China's banking sector risks and implications for the United States / Virgilio Bisio.

Format:

Book

Government document

Author/Creator:

Bisio, Virgilio, author.

Contributor:

U.S.-China Economic and Security Review Commission, issuing body.

Series:

U.S.-China Economic and Security Review Commission staff research report

Staff research report / U.S.-China Economic and Security Review Commission

Language:

English

Subjects (All):

Banks and banking--Government policy--China.

Banks and banking.

Banks and banking--China.

China--Economic conditions--2000-.

China.

China--Foreign economic relations--United States.

United States--Foreign economic relations--China.

United States.

International economic relations.

Economic history.

Banks and banking--Economic aspects.

Banks and banking--Government policy.

Physical Description:

1 online resource (28 pages) : color illustrations.

Place of Publication:

[Washington, D.C.] : U.S.-China Economic and Security Review Commission, 2020.

System Details:

text file

PDF

Summary:

Despite four decades of promised liberalization, the Communist Party-state retains the ability to intervene decisively in China's banking system to achieve desired outcomes. This comprehensive report lays out how China's banking system has reached an important juncture, as two ongoing and competing constraints have been exacerbated by the current COVID-19 pandemic: (1) Banks of all sizes are under pressure to clean up their balance sheets, raise new capital, and dispose of bad loans; and (2) Beijing is forcing them to boost lending to struggling companies at nonmarket rates to forestall a further slowdown in the pace of economic growth. Further, Beijing's focus on maintaining stability and control warps market incentives by encouraging investors, creditors, and depositors to evaluate a bank based on its likelihood of receiving government support if there is a risk of insolvency rather than on its individual fundamentals​. As the COVID-19 fallout grows, exchange rates are the most likely channel through which economic pain could be transmitted to U.S. investors. But a number of other channels, such as the inclusion of Chinese equities into major international indexes, are also raising the exposure of U.S. investors and savers to China's risky banking system. The report concludes by providing policy considerations for Congress and describes the opportunities and tradeoffs involved in the deepening integration of the U.S. and Chinese financial sectors.

Contents:

Executive summary.

Introduction.

Structural overview.

Composition of China's banking system.

Policy and regulatory oversight.

Underdevelopment of direct financing.

The role of shadow banking.

Trends and policy developments.

The evolution of balance sheet risks.

2019: year of the bailouts.

Nonperforming loans and capital replenishment.

Pandemic banking.

Spotlight: retail banking.

The rise of Fintech and the disruption of banking.

Impact on consumption.

Conclusion and considerations for Congress.

Notes:

"May 27, 2020."

Includes bibliographical references (pages 21-28).

Description based on online resource, PDF version; title from cover (USCC, viewed Apr. 16, 2021).

OCLC:

1184671802