Navigating China's 'shadow banking' sector

CHINA

Fears China's burgeoning shadow banking sector is heading for a hard landing are growing. Annabelle Williams talks to managers about the potential knock-on effects on the investment market.

Over the past five years, credit in China has been used to boost spending and growth. With interest rates at rock bottom, China’s wealthy class has turned to the country’s new breed of innovative – but often risky – investment products for wealth creation. But now the world’s second-largest economy is grappling with fears it is on course for a major financial crisis in its shadow banking sector. The cause of China’s debt problems date back to 2008. The country was suffering the effects of the global financial crisis and, after lowering interest rates three times in two months, the gov...