## Figure 1.25. China: Impact of Regulatory Tightening on Credit Expansion

## Source details

**Canonical URL:** [Figure 1.25. China: Impact of Regulatory Tightening on Credit Expansion](https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-25.pdf)

## Other formats

- [Markdown version](/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-25.pdf.md)
- [Structured JSON version](/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-25.pdf.json)

---

### Key messages
- Regulatory tightening has succeeded in reducing linkages between financial institutions.
- Regulatory tightening has curbed shadow credit, especially from smaller banks.
- Yields on wealth management products (WMPs) remain high, indicating continued use of leverage and risky assets to boost returns.
- Investment vehicle short-term borrowing continues to rise, suggesting reforms have yet to reduce risks.

### 1. Contribution to Bank Asset Growth (Percent, year-over-year growth)
- Chart axis ticks / values shown: -4, -2, 0, 2, 4, 6, 8, 10
- Time coverage shown in chart labels: 2013, 2014, 2015, 2016, 2017, 2018, 2018H1

### 2. Net Increase in Credit (Trillions of renminbi)
- Chart axis ticks / values shown: -2, 0, 2, 4, 6, 8, 10, 12, 14, 16, 18, 20
- Time labels visible: Jun. 2014, Dec. 14, Jun. 15, Dec. 15, Jun. 16, Dec. 16, Jun. 17, Dec. 17, Jun. 18, Dec. 18

### 3. Wealth Management Product Yield and Three-Year Corporate Bond Yield (Percent, basis points)
- Series presented: WMP yield (differentials, right scale), 3-year AAA corporate bond yield
- Axis ticks / values shown: 150, 120, 90, 60, 0 (basis points for differentials)
- Legend distinguishes Big 5 and Small and medium-sized banks

### 4. Investment Vehicle Borrowing in Interbank Market and from Sponsor Banks
- Axis ticks / values shown: 2.5, 3.5, 4.0, 3.0, 4.5, 5.0, 5.5, 4–60, –30, 30, 0, 10, 20, 6, 8, 10, 30, 12, 14, 40, 50, 16, 60 (values as depicted in figure)

### Notes (from the figure)
- In panel 2, shadow credit includes both bank-reported on-balance sheet investment vehicles (disclosed holdings of unconsolidated structured entities) and off-balance sheet investment vehicles. The latter is estimated as 65 percent of disclosed off-balance sheet wealth management products, which roughly deducts the proportion of assets that are claims on financial or public sector counterparties; as reported in China Bank Wealth Management Market Annual Report 2017.
- In panel 4, selected banks’ lending to own WMPs based on banks with available disclosures, including for four Big 5 banks and two mid-sized banks that accounted for 43 percent of off-balance sheet WMPs as of 2018:H1.
- WMP = wealth management product.

*Sources: Bank annual reports; CEIC; Haver Analytics; SNL Financial; Wind Information Co.; and IMF staff calculations.*

---


_Source: https://www.imf.org/-/media/files/publications/gfsr/2019/april/english/ch1data/charts/figure1-25.pdf_