China topples into bottomless pit of bad debt

Let’s begin with a quick wrap of last week’s policy measures, from BofA:

LPR cut:1yr/5yrLPR was cut by 5bp/15bp to 3.65%/4.30%on Aug 22nd vs 10bp of MLF cut last week. The asymmetric cuts showed support to the property market while refrained from sending too much easing signal amid inflation and RMB depreciation concern.

•PBOC credit analysis meeting: PBOC asked state banks to maintain stable loan growth, increase loan supports to real economy, especially SMEs, green finance and technology & innovation, satisfy developers’ reasonable financing demand, and increase supports to platform economy, while asked policy banks to increase supports to new infrastructure.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.