China

As the Chinese property crisis deepens, a new round of bank-led rescue efforts is on the horizon. While banks must shoulder part of the blame for the crisis, their options for action are limited.

The travails of Zhongzhi, a key player in China’s poorly regulated $3 trillion shadow financing market, underline why a future crisis in the country is more likely, not less.

The great and the good have assembled again for the Global Financial Leaders investment summit in Hong Kong.

While the dollar’s international supremacy is unchallenged for now, the wider landscape is shifting. Companies are raising more funding in renminbi and the currency’s use in international payments and settlements is growing.

A local asset management company in Liaoning province just bailed out Shengjing Bank – by borrowing the capital it needed from the very same ailing regional lender.

Global banks spent years trying to make China’s vast market work for them, mostly in vain. Today, though, China’s manufacturers are investing in Europe and the US, and turning to Western lenders for advice. The real China opportunity starts here.

While foreign investment in China has fallen, supply-chain shift is a different story. Rather than transferring their main production away from China, manufacturers are cultivating deep regional supply chains across Asia and beyond.

After years of easy Eurobond access and ramped-up Chinese lending, developing economies are now caught between rising interest rates and geopolitical tensions, making debt restructurings more numerous and more complicated. Despite some progress in inter-creditor talks, many debtor nations face an uncertain financial future.

Despite its roots in the region, HSBC’s Asian woes have sometimes seemed endemic. It has been overly dependent on Hong Kong and too often caught in Sino-US crosshairs. But under regional co-CEOs Surendra Rosha and David Liao, the lender has regained its confidence, is more regionally diverse than ever, and is busy posting record profits.