China’s Banking System Is Beginning To Show The Strain

Bad debts in China’s Banking System  are starting to mount.

According to the China Banking Regulatory Commission non-performing loans in China’s banking sector rose to RMB1.27 trillion at the end of the fourth quarter of 2015, up from RMB1.19 trillion in the third quarter. The balance of bad loans increased 51% from the end of 2014 to the end of 2015. What’s more, non-performing loans accounted for 1.67% of all loans at end December, up from 1.25% at the end of 2014.

However, while the above figures (released at the beginning of this week) show that bad loans continue to increase as China’s economy slows, lending by Chinese banks hit a record in January as the People’s Bank of China flooded the...