"What is clear is that we are dealing with a credit expansion of unprecedented scale, equal in size to the US and Japanese banking systems combined. The outcome may matter more for the world than anything that the US Federal Reserve does over coming months under Janet Yellen, well signalled in any case."
"The transmission channel to the global banking system is through Hong Kong and Macao. Beijing's credit squeeze is causing a scramble for off-shore Dollar credit to plug the gap. It is this that keeps global regulators awake at night, for foreign currency loans to Chinese companies have jumped from $270bn to an estimated $1.1 trillion since 2009."The Bank for International Settlements says Dollar loans have been growing 'very rapidly and may give rise to substantial financial stability risks,' enough to send tremors across the world."