Foreign investors sold 110 billion yuan (US$16.37 billion) net of China’s government debt last month, amid growing monetary divergence between its central bank and the US Federal Reserve that could further weaken the yuan.
China is increasingly turning to local government borrowing and regional banks to shore up growth, rather than conventional fiscal and monetary expansion, according to some analysts.
Many Chinese who borrowed millions to invest in property, or who hitched their wagon to a now-curtailed tech firm, are growing increasingly fearful of salary reductions, lay-offs, crackdowns and lockdowns.