China is currently facing a staggering $800 billion in defaults in its non-standard debt market.
Analysts estimate the size of this non-standard debt market to be massive, and recent data shows an alarming increase in defaults.
In just the first nine months of 2024, 60 non-standard debt products tied to LGFVs have either defaulted or flagged repayment risks-up 20% compared to the same period last year.
This surge has set a record for defaults in this debt sector, revealing deep cracks in the foundation of China's financial system and posing significant risks for the overall economy.
With defaults piling up, stories of financial loss have multiplied, including that of Ms. Lulu Fang, who lost her life savings due to such defaults.
Rising yields are making it more expensive for banks to borrow, straining their operations.
Recent government regulatory crackdowns, targeting risky and opaque banking practices, have further tightened the financial landscape, leaving banks under mounting strain amid China's deepening debt crisis.
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