China’s Financial Risks

The Trustee Chair aims to advance understanding of the key risk factors plaguing China’s complex financial system and to shed light on how these risks will impact the United States and other global economies

With lingering effects from the COVID-19 pandemic and an overburden real estate sector, China’s road to economic recovery and financial stability remains rocky. The Trustee Chair aims to advance understanding of the key risk factors plaguing China’s complex financial system and to shed light on how these risks will impact the United States and other global economies. Trustee Chair experts provide qualitative and quantitative analysis on China’s financial credibility, offer risk diagnostics, and provide potential pathways to improve the U.S.-China economic relationship. 

This project is made possible through generous support to CSIS.

Credit and Credibility Project

The Credit and Credibility Project assesses the probability of China facing a financial crisis or sharp economic slowdown in the near future, and the implications of these scenarios on U.S. economic and security interests.

Credit and Credibility

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Photo: Paul/Adobe Stock

Photo: Paul/Adobe Stock

Grasping Shadows: The Politics of China’s Deleveraging Campaign

A new report by the CSIS Trustee Chair in Chinese Business and Economics analyzes China’s multiyear deleveraging campaign and the end of China’s unprecedented credit expansion after the global financial crisis.

Report by Logan Wright — April 10, 2023

All China’s Financial Risks Content

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Timeline of China's Deleveraging Campaign: 2013–2021

The deleveraging campaign marked the end point of China’s unprecedented credit expansion after the global financial crisis. This timeline describes the four stages of the campaign, which are analyzed in further detail in the report "Grasping Shadows."

Digital Report by Logan Wright — May 31, 2023

China’s Slow-Motion Financial Crisis Is Unfolding as Expected

Logan Wright argues that a slow-motion financial crisis is unfolding in China as its credit bubble unwinds. Beijing’s credibility, built on a track record of intervention in response to financial stress, is waning from rising defaults and a growing sense of risk aversion.

Commentary by Logan Wright — September 21, 2022

The Evergrande Dilemma and Beijing’s Credibility

Evergrande’s woes indicate that Beijing’s priorities have changed and support for large property developers is no longer assured. Lenders, investors, and global markets are now responding to the government’s change in credibility, which could slow China’s economic growth.

Commentary by Logan Wright — October 1, 2021

The China Economic Risk Matrix

In this report, the authors advance a novel, China-specific tool for gauging when short-term financial stress collides with long-building vulnerabilities. It also sets out recommendations for U.S. policymakers on how to understand the risks to China’s economic resilience.

Report by Logan Wright , Daniel H. Rosen , and Lauren Gloudeman — September 21, 2020

Why Is Federal Government Action Not Shoring Up Markets? Alternative Explanations

The U.S. Congress and the Fed took major actions over the weekend to address the COVID-19 crisis, but on Monday financial markets dropped precipitously. Several CSIS experts weigh in on why these actions apparently were not effective and what will be needed going forward.

Commentary by Scott Kennedy , William Alan Reinsch , Scott Miller , Stephanie Segal , Matthew P. Goodman , and Daniel H. Rosen — March 17, 2020

Building a Better Deal with China

With Chinese vice premier Liu He in D.C. this week for trade talks, CSIS Freeman Chair experts Daniel Rosen and Scott Kennedy lay out possible goals and recommendations to create a pathway forward in U.S.-China relations.

Commentary by Daniel H. Rosen and Scott Kennedy — January 28, 2019

CogitAsia

China’s Credit & Credibility

In this episode, we discuss the current state of China’s financial system. China’s credit sector has expanded dramatically over the course of China’s unparalleled economic rise, yet now faces key problems that may impact overall economic stability.

Podcast Episode by Scott Kennedy , Logan Wright , and Daniel H. Rosen — October 12, 2018

Podcast CogitAsia