Over 13 percent of China's financial firms are found to be «high risk», according to an annual report from the People’s Bank of China.
Out of China’s 4,379 firms, China's regulator found 586 — the majority being smaller rural institutions — to be especially vulnerable. One bank got a «D» grade this year, meaning it went bankrupt, underwent a takeover, or lost its operating license.
The regulator notified each bank, unnamed in the report, of its rating and any potential policy changes, including increases in capital, reducing bad loans, limiting dividends, and even changing management, according to the report (in Mandarin).
One-Third Rural Lenders At High Risk
While foreign banks remain strong, over one-third of China’s rural lenders fell into the «high risk» category, as smaller firms struggle amid a slower Chinese economy and U.S. tariffs impeding growth.
U.S. President Donald Trump’s approach to China has resulted in 90 percent less investment from Chinese firms in the U.S. market.
