Nikkei Calls Chinese Policymakers Reckless

Nikkei: China's slow recovery is making officials reckless

As local authorities struggle to prop up the economy in the areas under their control, they are again turning to "shadow banking" -- loosely regulated entities that raise capital outside the formal banking system. "We plan to invite a college to the town," a representative of the local government says enthusiastically of Shuangfu New District. "We will create an attractive place with many residences and entertainment."

A so-called local government financing vehicle has played a big part in creating the massive development. Chongqing indirectly owns the entire shares of this LGFV. As is typical of these entities, it raises funds by issuing bonds. Its prospectus includes a list of properties owned by the business.

This article may have originally appeared in Chinese because the iFeng version has more detail.

iFeng: 日媒发文：中国经济是该踩油门 还是该刹车？

Will attract university settled, to create a comfortable residential and shopping center gathering new city - - In late April, in the western city of Chongqing, standing before a huge model display "double blessing New" development plan, the CMC director Li Yong said this. It is said that the population of the surrounding rural areas every year to thousands of people into the city scale, promote consumption.

If looking for large-scale development of financial resources, you will find a company called "double blessing Chongqing Construction Development". The company indirectly holds all the shares from the area, is one engaged in funding and infrastructure investments "financing platform."

This financing platform 2 to 3 months issued a total of 850 million yuan of two corporate bonds. Financing will be invested in infrastructure for the future transfer of land revenue to enterprises used to repay the principal. This is called the "shadow banking."

The article closes by criticizing the accelerate-brake model of Chinese policy. The gas was stepped on in Q1, and now the brakes are being slammed as malinvestment pops up in steel and property.

If the Chinese government had loose Prosperity accelerator, depress the brake the car will lead to real estate and stock market turmoil. Every time the fire will spread to Japan and other overseas markets. For China's policy developments impermanence of the world can only breathless close attention.