Chinese economy: After real estate, another big crisis is looming in the Chinese economy – banking sector

The Chinese economy is already on the brink of a major crisis, with major recession fears building up towards the end of the year. Moreover, it was real estate till now, that was a major recession indicator, with housing or property loan drastically dropping down from the bank’s assets, but this time the nation’s baking sector is also in a big fix, and needs a resolve at the earliest or else there is no saying how badly it could impact the country’s economy.

Why is the banking sector in China now in danger?

The NPL ratio for Chinese banks have dropped severely than the average standard amount designated by the government, clearly indicating that the banks are running at a major financial risk. Most important, rural and small-city banks are most affected by the ongoing banking crisis, as they do not have so much financial volume or buffer to handle, therefore, leaving them in crisis whenever the NPL ratio deteriorates.

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If this scenario around the banking system continues, the financial system in China could be in far more danger than anyone can imagine, looking at the fact that this nation has the potential to impact the entire world’ economy, due to its vast international trade relations and agreements, some countries like USA and Russia being the most powerful of them.

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