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China’s deleveraging bill tops US$500 bil

Bloomberg Published on Mon, May 08, 2017 / 7:33 AM GMT+8

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SINGAPORE (May 8): How much pain can Chinese leaders stomach? It’s becoming a key question for investors as the government’s stepped up campaign to rein in financial leverage ripples through markets.

The clampdown has erased at least US$453 billion ($637 billion) from the value of Chinese stocks and bonds since mid-April, spurred US$21 billion of cancelled debt sales and compelled the People’s Bank of China to inject US$48 billion into jittery money markets. Sales of asset-management products by lenders and trust companies have plunged by more than 30%, while domestic real estate transactions have slowed and metals prices have buckled.