The End of Financial Intermediation as a Driver in China

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Macroeconomics

<h2>The historic core statistics in China are not showing the changing nature of China's credit markets</h2><p>The latest burst of Chinese stimulus, whilst appearing to stimulate domestic credit is mainly boosting credit to financial institutions and the bond market.  The growing 'financialisation' of the Chinese economy should be a huge concern for investors and the flow of an exponential amount of money into asset markets should be a huge concern to investors.</p><p>Whilst the conclusions of this analysis are…</p>

The historic core statistics in China are not showing the changing nature of China's credit marketsThe latest burst of Chinese stimulus, whilst appearing to stimulate domestic credit is mainly boosting credit to financial institutions and the bond market.  The growing 'financialisation' of the Chinese economy should be a huge concern for investors and the flow of an exponential amount of money into asset markets should be a huge concern to investors.Whilst the conclusions of this analysis are…

Financialisation in China and How to Track It.