15 Mar China has now world’s biggest bank system
China keeps beating all possible records. For the first time in history, PRC’s banking system became the largest in the world, according to the Financial Times. The record was broken at the end of 2016, when the country’s bank assets hit $33tn, which is $2tn more than those of the Eurozone and more than double the US’ $16tn.
Among other reasons, such as a lending boost fueled by the 2008 global financial analysts feature the government programme of fiscal stimulus to fight the consequences of economic slowdown.
Three of the world’s four largest banks by assets are now Chinese. Industrial and Commercial Bank of China, China Construction Bank and Agricultural Bank of China held on to the top three spots in Forbes Global 2000 ranking as world’s most powerful companies in 2015.
Despite concerns on credit risks and unsustainable debt levels expressed by some analysts, the current size of China’s banking system supports country’s investments into infrastructure development and trade. Beijing’s flagship initiative of the New Silk Road is one of these ambitious projects demanding more funds and supporting infrastructure.
“China needs large banking system to serve the annual trade with New Silk Road countries worth US$2.5 trillion (an estimate to be achieved within a decade)”, explains Ian Harvey, CEO at CM CrossPay Limited, fast and secure payment and FX settlement platform for cross-border trade in products and services. “We have seen great interest from government bodies, corporates and SME’s transferring money into and out of China, and they are planning to increase their annual turnover”, adds Harvey.