Beijing

Last summer we outlined how Chinese banks obscure trillions in credit risk.

The powers that be in Beijing aren’t particularly keen on allowing the banking sector to report “real” data on souring loans - especially given the fragile state of the country’s economy. In some cases, the Politburo will pressure banks to simply roll over bad debt, effectively kicking the can.

In addition, banks carry around 40% of their credit risk outside of “official loans.” Here’s what Fitch had to say last year:

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

Earlier this month, China’s top stock regulator offered to resign after an experiment with a circuit breaker went horribly awry, triggering a series of harrowing selloffs on the SHCOMP that reverberated through world markets.

Since taking office in 2013, Xi Jinping has been on a mission to root out corruption among the ranks of the Communist Party.

Xi, whose efforts have affected both high-ranking officials and those lower on the totem pole, is keen on re-establishing party discipline. Policies handed down from on high often lose their teeth while filtering down through the sprawling party ranks. As The Atlantic put it last year, Xi wants to correct that by “reforming [China’s] very political culture.”

John Bolton has some typically bad recommendations for U.S. China policy: