In 2017, Chinese regulators have escalated a clampdown on the financial sector in an attempt to control the country's bulging debt load, which accounted for 257% of gross domestic product (GDP) in 2016. The reforms' key objectives are to delev-erage China's economy and financial system by eliminating regulatory arbitrage, slowing the pace of wealth management product issuance and investigating malpractice in the banking sector. So far, banking regulators the China Banking Regulatory Commission (CBRC) and the People's Bank of China (PBOC, the central bank) have been actively issuing tougher directives. Smaller Chinese lenders, with their weak profitability, capitalisation and funding profile, are likely to be hit hardest by the tighter requirements.
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