China Banks

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(01-09-2022, 05:32 PM)dreamybear Wrote: Will there be more pain to come before recovery ? 


Two Chinese local banks enter bankruptcy procedures (27 Aug 2022)

China Minsheng Bank Interim Results
Conditions of the industry
In the first half of 2022, China’s economic operation remained stable on the whole, but the operating environment became more complicated and severe. Due to the combined influences of tightened monetary policies in the developed economies, geopolitical conflicts and resurgences of the pandemic, the global economy struggled with high inflation and low growth. China’s economic development was confronted with pressures of shrinking demands, supply shock and weakening expectation. Since the second quarter, due to the sporadic outbreaks of the pandemic, market entities have faced more notable difficulties. In particular, medium, small and micro enterprises, some sectors and groups suffered relatively severer impact. New challenges were posed against stabilising growth, employment and price. Since June, as the pandemic prevention and control improved, a basket of policies to stabilise growth have been implemented, and the construction of major projects has been accelerated nationwide. China’s economy has shown signs of recovery, and the fundamentals of long-term positive growth remained unchanged...."
Yes, lots more pain. The drop in the real estate market and the knock-on effect on the construction sector and the banking system have to play out. Just the price to pay for 40 years of go-go growth. The geopolitical issues, reducing external demand and pandemic lockdowns are only amplifying a cyclical downturn that had to happen sooner or later.

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