The ratings agency says that China shadow bank activity stops growing; records first-ever fall as a share of GDP

  • broad shadow banking activity in China stopped growing during the six months between January and June 2017
  • for the first time since 2012, nominal GDP grew faster than shadow banking assets during H1 2017, resulting in such assets falling to 82.6% of GDP at 30 June 2017 versus a peak of 86.5% in 2016.
  • "Chinese shadow banking activity stopped growing in H1 2017 because of a fall in first, the issuance of higher risk instruments such as the banks' wealth management products, and second, non-bank financial institutions' asset management plans," says Michael Taylor, a "However, core shadow banking activity - including entrusted loans, trust loans, and undiscounted bankers' acceptances - has continued to grow, increasing in share when compared with the broad shadow banking sector," adds Taylor. "