China mobilizes aid for failing banks as local economies slow

[Elderberry]

Nikkei by ISSAKU HARADA 8/21/2019

Beijing shifts strategy in bid to quell mounting financial risks

China is changing tactics as it intervenes to prevent a string of bank failures amid a slowing economy and growing financial risks.

Bank of Jinzhou, based in the northeastern province of Liaoning, was the latest to receive a state-led rescue last month.

But the intervention differed in nature from May's government takeover of Baoshang Bank, which was put under de facto state ownership, roiling China's money market.

China's leadership under President Xi Jinping is on alert for potential causes of financial turmoil, and weak lenders face the prospect of being weeded out amid a consolidation of the banking sector.

When Inner Mongolia-based Baoshang was seized, central bank officials were installed in its management and state-owned China Construction Bank took charge of daily operations. Deposit insurance payoffs left some large corporate account holders at a loss. The seizure was the first government takeover of a bank in China in 18 years.

Beijing appears to be taking a less direct approach on Jinzhou. State-owned Industrial and Commercial Bank of China, as well as debt collection arms of China Construction Bank and Agricultural Bank of China, will together take a roughly 20% stake in Jinzhou.

More: https://asia.nikkei.com/Business/Banking-Finance/China-mobilizes-aid-for-failing-banks-as-local-economies-slow2

[truth_seeker]

This seems to me confirmation that China has their own problems. (as Trump says)

That in turn would establish the basis, for their needing solutions, in trade negotiations.