Deutsche Asset (in HK) says evidence of significant of progress in deleveraging

Deutsche Asset (in HK) says evidence of significant of progress in deleveraging

Deutsche Asset Management in Hong Kong nominate areas of significant areas of progress for debt unwinding in China:

  • A drop in the stock of wealth-management products
  • A slowdown in the growth of loans between financial institutions
  • A drop in credit gains from shadow banking (eg. companies lending to other companies with banks as the middlemen)

DB say the POBC

  • has managed to take out a lot of leverage out of the system and make the system safer by keeping overnight rates up and policy rates flat
  • And financial market deleveraging "will be a real focus next year" after Xi consolidates his position

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