‘Don’t depend on us’ – China’s government

‘Don’t depend on us’ – China’s government

A major factor behind the soaring growth of risky wealth-management products in China is that investors typically think the government stands behind them. Lately, nervous regulators have been emphasising that this isn’t so. But they’ll have to do a lot more to change expectations in a state-dominated economy.

Wealth-management products are short-term, high-yielding investments that are issued by banks. The market for such products is now worth close to $4 trillion, or nearly 40 percent of China’s gross domestic product. Banks are heavily reliant on them for liquidity, and investors have come to view them as more or less risk-free, thanks to previous government bailouts.  READ MORE:   https://www.bloomberg.com/view/articles/2017-03-06/china-s-hidden-risks-rise

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