Chinese Bank Liabilities Rise Above 200 Trillion Yuan For The First Time

Tyler Durden's picture

By now it is widely accepted that the biggest credit risk facing the global financial system is not so much among western banks, which have been closely scrutinized, and their balance sheets are largely exposed to both regulators and the public (perhaps with a few notable exceptions), but are arising from China. And while China's total leverage, by most counts, is somewhere in the 300% range, according to the IFF...

... and modestly lower according to other sources, the real worry is not so much the sovereign or corporate non-financial debt within China, but the leverage within its opaque, murky financial system.

What we do know about China's banks is what the government discloses, which is not much, however overnight China's Banking Regulatory Commission reported on its website the latest amount of total domestic assets on China's bank books: as of September the number is a stunning CNY217.3 trillion, or just over $32 trillion. On a year over year basis, this series grew at a whopping 14.7% in September, more than double the rate of growth of China's overall economy, and suggesting that something is truly broken in China's credit transmission mechanism.

 

As for bank liabilities, or loans and other even murkier obligations, the Chinese regulators reported that this number had grown even faster, by 15.5%, and has for the first time ever surpassed 200 trillion yuan - just shy of USD $30 trillion - for the first time, and hitting CNY200.4 trillion as of September 30. By comparison, total US bank liabilities are roughly half this number.

Normally we would end with something cynical or witty to add, alas when looking at this massive number, of which by rough estimates somewhere between 15% and 20% is in the form of bad loans, there is nothing witty, or even cynical, to be added.

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Troy Ounce's picture

 

 

A Chinaman, Jap and an American went into a bar....

Ghost of Porky's picture

Tirty tu trirrion dorrars!?!?! Ho Ree Fuk!

Dead Canary's picture

Ray-cist bastard! Those slanty eyed bastards deserve respect! Hurrmph!

Theosebes Goodfellow's picture

~"Those slanty eyed bastards deserve respect!"~

In a sense, they have. China is tightening their capital export controls starting in 2017, from $50kUSD to just $25KUSD. Chinese middle and upper classes are trying to get more money out right now. Think of it as shunting closed the exit gates.

Dead Canary's picture

A few years ago, I thought China was the place to be. But now, I think if I were a younger man, I'd be learning Russian.

And that new Philippino kid is showing promise!

LawsofPhysics's picture

Yes, the Yuan is pegged to zero....

Most simply do not know it yet.

same as it ever was...

Erek's picture

But, what will the chinese billionaire Ca Ching say about it?

Or will he consult Gartman first?

Bay of Pigs's picture

Which explains why they are buying Japanese bonds.

What a shit show. Send in the clowns.

 

LawsofPhysics's picture

They are already here...

 

"Give me control of a nation's money..."

lasvegaspersona's picture

'Chinese torture...best torture'...Amy Tan

Ghost of Porky's picture

Who care about debt riabirity! Gord, bitchez!

cognitive dissident's picture

what could possibly go worng?

I mean, wrong?

Theosebes Goodfellow's picture

So sorry to tell you, round-eye, but there is many more wong in this than "Chinee" phone book! Preaze accept apology and this loverly ginzu knife set!

Fishy Rickster's picture

How industrious of the Chinese people, to have amassed such wealth in ASSETS.

aliens is here's picture

Nothing few trillion won't help just add few more zeros behind the zeros.

DirkDiggler11's picture

Overstated Assets and Understated Liabilities,... $32 TRILLION... Oh Shit, this certainly won't end well...

Consuelo's picture

 

 

"By now it is widely accepted that the biggest credit risk facing the global financial system is not so much among western banks, which have been closely scrutinized, and their balance sheets are largely exposed to both regulators and the public (perhaps with a few notable exceptions"...

 

Now that...   Is worthy of MDB-level praise.

Bear's picture

Best way out for China ... Print more and buy US ... oh, that's what they are doing!

g3h's picture

Where is the actual China's Banking Regulatory Commission link?

joego1's picture

The communist Chinese government can just do a reset back to communism and say it was just a failed experiment.

Dr. Bonzo's picture

The communist Chinese government can just do a reset back to communism and say it was just a failed experiment.

Why? They're all trilllionaires buying up the entire planet. When it all fails their money's not going anywhere. What do you think all that asset buying bs is? It's one gigantic monopoly money laundering operation. They're converting pure digital fantasy-nothing into cold hard assets, blue chip German high tech, beach front property, New York condos, Central Park apartment complexes... we're handing them the fucking world for nothing... why the fuck would they ever wanna go back to communism? By the time it all fails they'll own half the fucking planet anyhow. It's immaterial. And we're letting them.

LawsofPhysics's picture

Yes, this is why the Chinese DO NOT want to be a "reserve currency", as it would require TRANSPARENCY!

jaylemz's picture

Well... does that mean the us has transparency then?

DaBears's picture

They aren't converting shit, they are simply spending that ex-$4, now $3.14 trillion reserves they saved up last 70 years. sellers of "blue chip German high tech, beach front property, New York condos, Central Park apartment complexes" doesn't take Mao-noploy Yuans, they take the Greenbacks, euro-trash and gold though.

Dr. Bonzo's picture

A few key strokes away from total bliss..... if only I knew the nerd hacking away on his little terminal performing the actual entries at that PBOC desk..... I'd be up to my tits in Shangcouver money laudering operations too...... 

FreeShitter's picture

The NWO is this close to being finally completed.

a1sinclair@aol.com's picture

China debt to GDP is almost 500%  according to my estimates--see below.  Banking and shadow banking has exploded from $9 trillion in 2008 to over $40 trillion now ($32T + $9T).  McKinsey is saying that global debt has increased $57 trillion since the crisis started and my numbers would indicate that some $35 to $40 trillion was in China alone + U S  $9T, Japan + $4T, Europe + $10 T just in governent debt.  McKinsey needs to review their 2014 numbers.

               Estimate

China’s Federal debt               $5.0  Trillion

Local Government Bonds 3.0

Shadow Banking/WMP               9.4

Bank assets                                        32.0  updated

Private lending         3.0   est

P 2 P Lending 1.5

Corporate Bonds  40 t RMB   6.1

External Bonds   1.0

 

Total                         $61.6   Trillion

Deduct  -        10.0  Interbank/bonds owned by banks/WMP loans to banks, etc.

Net Debt            $ 51.6   Trillion

Adjusted Total—lending related   $51.6  trillion— 491% of GDP or the highest in the world

 

 

 

 

 

a1sinclair@aol.com's picture

I have accumulated numbers from various sources.  You will notice I used the $32 trillion from today's update.  Banking was $8 trillion in 2008 and Shadow Banking was $1 trillion for the total of $9 trillion in 2008.  Now banking is $32 trillion and $9 trillion in Shadow Banking for a total of $41 trillion or plus $32 trillion.  The U S banking system net of the $2 trillion in excess reserves at The Fed has moved from $9 trillion in 2008 to around $11 trillion now.  A $2 trillion increase vs $32 trillion in china is a big difference.  In 2008 a $ of new debt was gaining almost a $ of new GDP; it is now under 20 cents.  That is not sustainable.  A crisis is coming.  The numbers that are hard to find involve private lending which I think is even larger than I have stated, P2P lending has exploded.  I have picked up numbers from Caixin, China Daily, WSJ, online about Shadow Banking estimates, P2P, Corp Bonds, Foreign Bonds, China's Central Government debt and the move to issue bonds more locally.  A huge chunk of the bank lending is to local government entities and State Owned Enterprises so total government debt is much higher than most acknowledge.  Corporate lending is estimated by many sources at over 165% of GDP; that is more than double U S corporate lending. It is estimated that most of the one trillion dollar increase in the U S banking system is in overseas lending.  Any other questions??? 

 

a1sinclair@aol.com's picture

Thought my first reply got lost---some duplicaton here---China's banking system was $8 trillion and their shadow banking system was $1 trillion in $2008.  Our banking system was $9 trillion in 2008 and it has expanded to about $11 trillion net of the $2 trillion in excess reserves at The Fed.  I have numerous sources for my numbers which include Caixin, China Post, WSJ, Zero Hedge articles and others.  China's system has exploded to $32 trillion per today's article and shadow banking to $9 trillion from $1 in 2008.  The numbers that are hard to prove are private lending and P2P lending.  The composition of interbank lending, Wealth Management Products and Shadow Banking investments are also from various estimates from others but are difficult to pinpoint.  In any case debt in China has exploded since our crisis.

DaBears's picture

How much money does Chinese really have today with CNY217.3 trillion in debt? whatever it's left in their foreign reserves[$3.14t] minus $2.8 trillion of your investments outside of China. No one in their right mind would buy or take their Mao-noploy money any more.