Jump in China’s shadow banking products potentially destabilising

Cause for concern: A woman walks past the headquarters of PBo in Beijing. China’s credit to gross domestic product has accelerated rapidly and surpassed 200 since 2015. — Reuters

THE 30% increase in wealth management products (WMPs) held in off-balance sheets of Chinese banks is potentially destabilising but in the short term, it is unlikely to have a major impact.

“This is given that China still has ample reserves,’’ said Chris Eng, head of research, Etiqa Insurance & Takaful. “But it is surprising that it grew by 30%.’’