Ratings agency Fitch on wealth management products (WMPs) issued by Chinese banks
They note that outstanding balances of wealth management products continued to rise in 2H17
- But there has been some regulatory success in reining in contagion and liquidity risks
- The firm notes in particular "by engineering a significant drop in interbank WMP investment"
Total WMP issuance was CNY173.6 trillion in 2017, up 3% from 2016
- Outstanding WMPs rose by 2% in 2017, reaching CNY29.5 trillion at year-end, equivalent to around 36% of GDP
- This implied 4% growth in 2H17, but the slowdown was significant when compared with annual growth of 24% in 2016
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If Fitch is right on a reduction in contagion risk, that is good news
