Not Advisable To Misread China's Banking Sector

Market participants should not short China’s banking sector based on pessimistic assumptions, according to the state-owned newspaper Securities Times. The article followed a Goldman Sachs’ report which downgraded some major Chinese banks. The institutions have actively reduced their exposure to real-estate risks and the proportion of property developer loans and non-standard assets in the sector have declined to varying degrees. With the effort of local governments and financial institutions, existing risky projects are effectively resolved by lowering the interest burden and debt restructuring. Meanwhile, China’s infrastructure push this year will also boost banks’ government credit business, the newspaper said. (Source: Securities Times)