Asian Economist

Kok Peng Chan

Kok Peng has over three decades of experience covering the global economy and financial markets. He spent the bulk of his career in top global investment banks where he covered the Asian economies and stockmarkets. During this period, he travelled extensively to meet clients that cut across business lines. They include fund managers, hedge fund managers, private banking clients, corporates, and fixed income investors in the US, Europe, Japan, Singapore, Hong Kong and Australia. He is well liked by clients because of his commitment to a consistent framework and the ability to explain economic and financial developments with actionable investment recommendations. As a result he was ranked among top 3 economists in many surveys and polls conducted by financial magazines.

Cross Asset Strategy

Multiple Countries / Cross Asset Strategy

<ul>
<li>China’s bank-centric funding model is an under-reported risk that appears to be lost amidst the current rally in Chinese stocks</li>
<li>While it powered China’s investment boom previously, this model now misallocates capital, warehouses property losses on bank balance sheets, blunts PBoC easing, prolongs deflation risks and echoes Japan-style balance-sheet stagnation</li>
<li>Without credible bank clean-up and a shift toward bond, equity and REIT funding, China’s rally risks remaining tactical rather than structural. The current rally does not signal a multi-year bull-run</li>
</ul>


China’s bank-centric funding model is an under-reported risk that appears to be lost amidst the current rally in Chinese stocks
While it powered China’s investment boom previously, this model now misallocates capital, warehouses property losses on bank balance sheets, blunts PBoC easing, prolongs deflation risks and echoes Japan-style balance-sheet stagnation
Without credible bank clean-up and a shift toward bond, equity and REIT funding, China’s rally risks remaining tactical rather than structural. The current rally does not signal a multi-year bull-run


China’s Bank-Centric Funding: An Under-Reported Risk