What are the little-understood risks of China's 2009 credit boom
The packaging of loans into wealth management products. In our view this is probably the most disconcerting development in the Chinese banking sector over the last couple of years. There is very, very bad transparency about this among Chinese banks and it has gotten worse in 2010. The banks have never been forthcoming about the nominal amount of loans they get rid of. The number we were able to track in the past was the number of wealth management products they issued, and we used that as an indicator of activity. The problem is, in 2010, a lot of banks have even stopped reporting that...
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