China’s money-market cash squeeze is likely to reduce credit growth this year by 750 billion yuan ($122 billion), an amount equivalent to the size of Vietnam’s economy, according to a Bloomberg News survey.
The damage to China's economy through a liquidity crunch could prove devastating to the property bubble if the central bank does not intervene or intervenes too slowly.
What is interesting in the article is the acknowledgement by state media that Ordos, the nearly empty newly built city, does have financial problems.
One wonders if the Chinese government may gradually become more transparent with their statistics?
If they eventually propose to float the yuan, transparency will be necessary. Perhaps this is also a reason they are buying so much physical gold to back a contender to the US dollar?
Nevertheless, China has large structural issues to overcome, thanks in part to low domestic demand for its own goods, before it can prove to the world that it has a stable enough economy to be a candidate for a major world currency.