It's official: Foreign lending to China and emerging markets collapsed at the end of last year
Reuters
From panic in the Chinese stock markets in August and January, to a return to a commodities bull market and rising steel prices, the waters have been choppy to say the least.
But it is worth remembering just how bad it got for emerging markets in 2015 and data from the Bank for International Settlements, the Basel-based central bank for central banks, shows just how bad it's been.
The BIS said: "Cross-border bank credit to emerging market economies in aggregate contracted by 8% in the year to end-December 2015, the largest annual rate of contraction since 2009."
Claims on China fell by $114 billion (£79 billion), the largest drop during the quarter, according to the BIS.
The figures show how quickly a panic can spread in the banking sector. "Whereas in Q3 2015 this slowdown was most pronounced for interbank activity and lending to emerging market economies, in Q4 2015 it spread across sectors, major currencies and regions," the BIS said.
Here's the chart:
BIS
The concerns have evaporated since then for the most part. The world's second largest economy added 2.34 trillion yuan ($362 billion) of new debt in March, far exceeding the median forecast of 1.4 trillion yuan in a Bloomberg survey.
The surprising data prompted George Soros to say that the debt explosion in China "eerily resembles what happened during the financial crisis in the U.S. in 2007-08, which was similarly fueled by credit growth," according to Bloomberg.
"Most of money that banks are supplying [in China] is needed to keep bad debts and loss-making enterprises alive," he said at a conference at the Asia Society in New York.
NOW WATCH: How ISIS makes over $1 billion a year
- T20WC broadcasters announce special feed for hearing and visually impaired fans
- Motorola Edge 50 Fusion with 144Hz pOLED display, 5,00mAh battery launched starting at ₹22,999
- Today's Silver Prices (May 16, 2024): Updates for Mumbai, Delhi, Kolkata, Bengaluru, Chennai, and other Indian cities
- Bridgerton season 3 will be out on Netflix India today! Here’s everything you need to know about the popular period drama
- With over one lakh fresh jobs, hotel industry could revitalise Indian job market in the next 18 months: Report
- Nothing Phone (2a) blue edition launched
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market