Abstract
The chapter describes the role of LGFVs in Chinese capitalism. It details the data on the use and misuse of capital by LGFVs. It explains access to capital by small business and the role of Shadow Banking in SME loans. Moral hazard and the risks of defaults in the private lending market are also mentioned. It describes interbank markets and Shadow Banking and the problem of maturity mismatch. It explains deleveraging in China and the ability of the state to recapitalize financial institutions. It also mentions the “Tightening Circle of Capital” and Shadow Banking. It gives the example of Dongbei Steel in Liaoning province and the relationship to Shadow Banking. It draws on comparisons with the US crisis and describes the regional differences in capital flows.
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Collier, A. (2017). What Does the Future Hold for Shadow Banking?. In: Shadow Banking and the Rise of Capitalism in China. Palgrave Macmillan, Singapore. https://doi.org/10.1007/978-981-10-2996-7_11
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DOI: https://doi.org/10.1007/978-981-10-2996-7_11
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