Borrowing down, parading up


China’s “cheap money” era may be coming to an end, as the amount of debt available in the country’s economy plunged more than $200 billion – or roughly 20% – during the first quarter of the year. The sudden credit crunch comes as the Chinese government looks to curb high levels of borrowing that have fueled the economy’s growth. “The fall in the outstanding amount of broad social financing is bigger than expected,” Ding Shuang, chief China economist for Standard Chartered in Hong Kong, told the South China Morning Post.

China’s measure of credit and liquidity in the economy, called social financing, fell $211.85 billion during the first three months of the year compared to the same time in 2017, the People’s Bank of China said on Friday. The large majority of that financing, roughly 87%, came in the form of bank loans. And “shadow bank financing” fell as Beijing continued to clamp down on illicit deals.

Meanwhile, via WSJ: Mr. Xi, who is China’s military commander-in-chief, boarded a guided-missile destroyer to review a parade of 48 vessels—including nuclear missile submarines and China’s first aircraft carrier. Wearing military fatigues, Mr. Xi was shown watching J-15 fighter jets taking off from the carrier, the Liaoning, following the parade.

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