Suicides in Wenzhou link to Chinese defaults
The private-loans market in Wenzhou has created a network of underground financing that is thought to have drawn in nearly 90 per cent of households and 60 per cent of local companies.
Talk about far reaching impact on the citizenry of China. Imagine if Bernie Madoff had sucked in the savings of 90% of New Yorkers.
The chief concern, one that evidently has begun to trouble Beijing, is that the underground lending networks are so pervasive that each default is wildly magnified. A collapse in the loan triangles between companies, shadow banks and private investors seems inevitable.
No comments:
Post a Comment