Beijing's strategy to reroute money away from state-owned giants towards smaller firms to help fuel the economic transformation behind its reform plans is less of a success than it may seem on the surface.Lending has increased in line with Beijing's orders. Butbanks have found loopholes allowing them to lend to state-owned firms and some borrowers are local-government-owned, operating in saturated sectors Beijing is trying to consolidate, aggravating the risks facing the financial sector rather than alleviating them.
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![Analysis: Forced lending to China SMEs may risk more harm than good Analysis: Forced lending to China SMEs may risk more harm than good](/sme-d8/dev/sites/default/files/styles/large/public/blogs/471318_8261835053_cd4e107006_c.jpg?itok=nezxbBOQ)