Bill Evans, Research Analyst at Westpac, suggests that growth in the Chinese economy is expected to slow as consumption and net exports are unable to compensate for the ongoing slowdown in investment. Key Quotes “The big uncertainties and risks centre around the Chinese financial system.” “China realises that it must move away from its growth model based on credit fuelled exports and investment. In particular the role of the financial sector must change from channelling high savings at low cost to strategic sectors, to facilitating China’s economic transformation to a more sustainable model based on services and consumption. But the “old” model has resulted in financial assets growing from 260% of GDP in 2011 to 470% in 2016 (IMF, 2017). The excessive growth (around 30% per annum over the last 10 years) has been in the largely unregulated non-bank sector.” “President Xi has nominated poverty; pollution and financial leverage as his key “challenges”. The “shadow banking sector” particularly funds property development and speculation; local governments (which explain 80% of infrastructure investment); and commodity speculators. All these users of funds expect excessive returns and can service higher loan payments. The sector is beginning to be squeezed.” “We are already seeing some evidence of this squeeze on the non-bank sector. Banks are no longer allowed to guarantee wealth management products; entrusted loans (corporates borrowing to lend to other corporates with banks operating as agents) have been banned; rapid growth in short term interbank funding has been slowed; and general funding for wealth management products is being restricted. Growth in the non- bank sector is severely lagging the pace of 2017.” FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next EUR/USD Forecast: 1.1700 confluence area might hinder further recovery, EZ CPI in focus FX Street 5 years Bill Evans, Research Analyst at Westpac, suggests that growth in the Chinese economy is expected to slow as consumption and net exports are unable to compensate for the ongoing slowdown in investment. Key Quotes "The big uncertainties and risks centre around the Chinese financial system." "China realises that it must move away from its growth model based on credit fuelled exports and investment. In particular the role of the financial sector must change from channelling high savings at low cost to strategic sectors, to facilitating China's economic transformation to a more sustainable model based on services and consumption. But the… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.