The Chinese financial crisis that no one talks about
Economists have been wondering for months whether China’s real estate collapse would trigger a financial crisis. So far the consensus has been no. But perhaps the financial crisis has been there all along, before our eyes.
The answer depends on how you define the terms “financial,” “crisis,” and “financial crisis.” Conversations about financial crises in China or elsewhere typically focus on banks or overtly banking institutions as the heart of the financial system. We care about their plight because these companies are particularly exposed to economic headwinds and are also particularly capable of collapsing on the rest of the economy. But there are many companies that you wouldn’t call a bank that operate as one bank, particularly in China.
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