China's Shadow Banking Evolves to Dodge Crackdown
- Brokerage asset-management plans rise 40%, as trusts grow 17%
- `It’s like water finding the way around the dam,' says Moody's
The Bank of China Tower, center left, and other commercial buildings stand illuminated at night in this photograph taken with a tilt-shift lens at night in Hong Kong, China on Friday, Nov. 27, 2015. Secondary private residential property prices dropped 3.9 percent since peaking in September, according to an index published by broker Centaline Property Agency Ltd.
Photographer: David Paul Morris/BloombergChina’s shadow lending has evolved to dodge a clampdown, with brokers and funds taking on the role previously played by more heavily regulated trusts in expanding informal financing.
Banks are increasingly turning to so-called directional asset-management plans issued by brokerages and the subsidiaries of mutual-fund providers to channel lending. The amount of money placed in such products jumped 70 percent last year to 18.8 trillion yuan ($2.9 trillion), outpacing the 17 percent growth for trust assets, according to data provided by industry groups.