SINOWEEKLYPLUS

Several signs of financial risks emerging; who is the real target of China’s anti-mafia campaign?

SinoInsight 1
A total of 33,101 apartments were sold off on Taobao’s judicial auction site in 2017. This January, 25,518 apartments were auctioned off, or about 80 percent of the 2017 total.

OUR TAKE
Under pressure from the central authorities, Chinese banks are deleveraging and rescinding loans to businesses. With their credit lines cut, businesses are forced to sell their property to pay off loans. When businesses are unable to sell their property in time to repay loans to banks, the Chinese courts step in to auction off the property. This phenomenon will occur more frequently.

SinoInsight 2

Over the past four months, various private and public Chinese banks shuttered a total of 326 bank outlets across China. Most of the closures (304) took place between October to December of 2017.

Six regions saw upwards of 20 outlets being closed. The regions are Shanghai (21), Sichuan (22), Tianjin (26), Beijing (27), Yunnan (27), and Zhejiang (42). Total outlets closed in these regions comprise 42 percent of all closures to date.

OUR TAKE
The China Banking Regulatory Commission issued a total of 3,452 violations, punished 1,877 banks, and collected nearly 3 billion yuan worth of fines in 2017. Banks are not experiencing good times and are forced to close outlets to cut costs. The Agricultural Bank of China, Industrial and Commercial Bank of China, China Construction Bank, and Bank of China also laid off nearly 26,000 staff in 2017.

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