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The Crisis in China’s Banking Sector: An Impending Catastrophe
The Chinese banking sector is currently experiencing a profound crisis, marked by the failure, merger, or dissolution of 199 small and medium-sized banks as of early 2024. These events are a direct consequence of the economic downturn in China, which has seen an unprecedented ripple effect through its financial institutions. In particular, the impacts of hidden local government debt intertwined with a bursting real estate bubble present a ticking time bomb for lenders, with experts warning of potential consolidations and closures that could lead to a broader financial crisis.