China: Targeted financial reforms – Westpac
China’s de-leveraging effort is likely to be on a targeted basis, with three areas being highlighted: interbank funding activities, wealth management products and off-balance sheet items, according to analysts at Westpac.
“The impact from de-leveraging efforts can be seen on these fronts. First, interbank liabilities tapered off. Second, balance of wealth management products (WMPs) has started to fall. Third, growth of entrusted and trusted loans stabilised. However, the small improvements made should not be seen enough by the authorities to mitigate associated risks in the financial system. De-leveraging effort is to continue.”