Is China's economy on the verge of collapse? This edition of Insight China explores the economic issues on every China-watcher's mind: Shadow Banking and Overcapacity. Leading experts Arthur R Kroeber (Dragonomics), Joerg Wuttke (BIAC/OECD) and Joe Zhang (author of China's Shadow Banking: The Next Subprime Crisis) will review and debate the issues on 29th August, 4:00 pm, at the Kempinski Hotel Beijing. 

The shadow banking system is the collection of non-bank financial intermediaries that provide services similar to traditional commercial banks charging a premium to individuals and companies looking for finance. The size of the shadow banking system in China is overwhelming, at an estimated 34 trillion renminbi, and representing 36 per cent of all the loans made in China by the traditional, regulated banking sector. As authorities seek to rebalance the economy, the amount of bank credit available to China's millions of small- to-mid-sized companies is expected to tighten, only reinforcing the dependency of many of China's non-state-supported enterprises on the shadow banking industry.

Overcapacity, a scenario in which an industry or business cannot sell as much as it produces, troubles several key Chinese industries including the solar and wind, steel, cement, aluminium, and glass makers and shipbuilders. This situation is fuelled by government subsidies and was exacerbated by Beijing’s response to the financial crisis in 2008. Overcapacity is crushing profit margins in many industries and wiping out businesses globally.

China bears say if economic growth in China continues to slow, the massive industrial overcapacity would swamp China in a wave of bankruptcies, rising sudden defaults on loans made in the country’s shadow banking system, threatening to bring down China’s traditional banking sector and throw the world’s second-largest economy in jeopardy.

Join Arthur R Kroeber (Dragonomics), Joerg Wuttke (BIAC/OECD) and Joe Zhang (author of  China's Shadow Banking: The Next Subprime Crisis) in discussing how big of a threat this mean to China's future economic growth. 

Agenda

16:00–16:30  Registration and Coffee

16:30–16:35  Welcome remarks by Davide Cucino, President of European Chamber

16:35–17:20  Presentation by speakers

17:20–18:00  Panel discussion with Q&A session

18:00 End of Event

Sponsorship opportunities

For sponsorship opportunities please contact Ms Betty Yin byin@europeanchamber.com.cn / +86 (10) 6462 2066 ext. 23. 

Speakers

Arthur R. Kroeber

Arthur R. Kroeber focuses on China’s political economy and its engagement with global economic institutions. He is managing director of GaveKal Dragonomics, an independent global economic research firm, and editor of its journal China Economic Quarterly. Mr. Kroeber is based in Beijing, where he has lived since 2002.

Joe Zhang

Joe Zhang is the author of Inside China's Shadow Banking: The Next Subprime Crisis. Former Deputy Head of China Investment Banking at UBS and People's Bank of China official he is currentl ythe chairman of Wansui Micro Credit Company in Guangzhou. Drawing on his experience at UBS and PBOC, as well as the work of prominent economists, Joe Zhang explains on his book shadow banking in China for investors, economists, laypeople, and the general public.

Joerg Wuttke

Joerg Wuttke is Chairman of the Business and Industry Advisory Committee to the OECD (BIAC) China Desk. Mr Wuttke is also part of a small informal network of leading China experts to guide EU Commissioner De Gucht on China issues. Chief Representative of BASF China, based in Beijing. From 2007 to 2010, he was the President of the European Union Chamber of Commerce in China. He is currently Vice President and Chief Representative of BASF in China.