China overtakes eurozone as world's largest banking system
- New analysis by the Financial Times shows China's banking system has overtaken the eurozone to become the world's biggest by assets. The status reflects the country's increasing global influence and its reliance on growth driven by debt.
According to FT, China's GDP surpassed the EU's in 2011 at market exchange rates, but its banking system did not take over the top spot until the end of last year.
"The massive size of China's banking system is less a cause for celebration than a sign of an economy overly dependent on bank-financed investment, beset by inefficient resource allocation, and subject to enormous credit risks," said Eswar Prasad, an economist at Cornell University and former head of the China division at the IMF.
Statistics show Chinese bank assets hit $33 trillion at the end of 2016, versus $31 trillion for the eurozone. US assets stood at $16 trillion and the Japanese at $7 trillion.
The value of China's banking system is more than 3.1 times the size of the country's annual economic output, compared with 2.8 times for the eurozone and its banks, the FT analyzed.(Excerpt) Read more at: rt.com ...
- Photo credit(s): rt.com