China’s Financial Crisis: from Wenzhou to the Global Economy?

I’m not trying to assess the effects an alleged crash of Chinese shadow banks right now – the chain reaction reportedly started with a certain Wang Xiaodong who went into hiding in Wenzhou – will lead to a more general financial crisis in China, in that it could reach the property market. That’s what a report published by German daily Die Welt on Friday seems to suggest. If true, it would add to the pressure which stems from loans taken by provincial investment companies, to finance the “stimulus” decreed by Beijing in the wake of the global financial crisis, to keep the domestic economy going.

A short link collection of earlier opinions, plus an exchange of more recent opinions (on capital allocation, rather than on shadow banking in particular),  can be found here.

The Universal Commenter: Schadenfreude transcends Borders

The Universal Commenter: Schadenfreude transcends Borders

Anyway, what really caught my eyes wasn’t the Welt article, but the commenting thread that followed it:

Hehe – first, the slit eyes steal our know-how, and next, they go down the drain… Who cares…

(Hihi – zuerst klauen die Schlitzies unser Know-how – und dann gehen sie den Bach runter…
… wen juckt’s…

Or

Great! That won’t hurt. Maybe it will make the Chinese get down from their high horse. Their arrogance and ado has annoyed me for a long time.

(Super! Das schad nix! Vielleicht kommen die Chins dann mal von ihrem hohen R0ß etwas herunter. Deren Überheblichkeit und Gehabe geht mir schon lange auf die Nerven.)

The moral of the story: you don’t need to be a Huanqiu Shibao commenter to be somewhat, umm, dense. (A Chinese financial crisis of a magnitude these commenters seem to expect is hardly what the global economy – including Europe – is waiting for).

Caixin Online provided background on the Wenzhou financial network on Tuesday – in English here.

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4 Responses to “China’s Financial Crisis: from Wenzhou to the Global Economy?”

  1. That Caixin link is a very good. I updated my latest entry with a link about Boss Sun’s dual banking adventures which should give you a good chortle.

    Thank God, I was not talked into similar lending ventures when in Fz and they would have involved Jiangsu province.

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