Renewed concerns over a slowdown in the Chinese economy emerged today as Beijing moved to rein in potential dangers in the nation's shadow banking system.
China’s services firms mirrored a slowdown in manufacturing at the end of last year as HSBC’s purchasing manager’s survey — where a score of 50 signals growth — dropped to 50.9 in December, its lowest since August 2011.
The latest evidence of a slowdown comes from data for last year which show the world’s second-biggest economy grew at its slowest rate since 1999.
Leaders acknowledge threats from China’s shadow banking system, which has grown strongly in the past three years as banks aim to skirt capital and loan-to-deposit rules by lending through complex trust structures. Trust companies have become one of the biggest lenders to local authorities.
The new guidance says shadow banking has been “beneficial” but says trusts should not engage in credit activities and calls for closer monitoring and tighter regulation of banks’ off-balance-sheet lending.