Under Pressure: Why China is Pledging More Capital for its Banks
Beijing is acting now to stave off a financial crisis despite the country’s top banks appearing healthy on paper.
An Industrial and Commercial Bank of China branch located in Beijing's Tianyin Mansion. Credit: Eagle via Adobe Stock
One of the most surprising and potentially important stimulus policies the Chinese government has announced in recent months was its pledge to recapitalize large banks using so-called special purpose bonds. While the total amount of the recapitalization has not yet been revealed, several news outlets have reported a figure in the range of 1 trillion renminbi ($138 billion). The announcement harkened back to the late 1990s when the entire banking system was struggling under high levels of ba
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If Xi Jinping is becoming more preoccupied with internal politics, it could lead to a period of relative calm in China’s relations with the United States.
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