China’s shadow banking shrinks amid delicate policy dance

CNBC - Amid a spate of default headlines, China's shadow banking sector is slowing, but loans overall continue to grow amid a delicate policy dance between economic growth and tightening credit.

"On the one hand, (regulators) try to control and taper down on the China shadow banking system side and on the other hand, they need to pump liquidity into the system to ensure the rates do not spike up too drastically," said David Poh, regional head of asset allocation at Societe Generale private banking. "This is like a fine balance between the two."

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