When we look back at China’s extraordinary building and spending spree over the last decade — all those skyscrapers, modern apartment blocks, new airports, the Belt and Road Initiative, the upgrade of its navy, a countrywide network of bullet trains and so on — there’s one simple but important question to ask: Where did all the money come from? The simple answer is, the country’s banks. With local governments starved of cash and the central government keen to keep its own deficits under control, they have been the only possible source of so much money. The enormous burden taken on by the banks is, however, a major reason why the Communist Party should now be worried about the risks that have built up in China’s financial system. Following the logic above, we should ask from where the banks got the funding they’ve needed to make their mountains of loans. The initial answer lies in Beijing’s opening up to foreign investment and rapid export growth, particularly from