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Regulation, financialization and fraud in Chinese commodity markets after the Global Financial Crisis
The Chinese government’s 2008 fiscal stimulus resulted in a surge of liquidity flowing into the country’s shadow banking system. The paper focuses on two financing channels: the Fanya Metal Exchange and the commodity collateral financing market, which are paradigmatic for the unintended consequences of this credit bubble. The opacity of these markets and the assumption that asset prices would rise indefinitely incentivized widespread fraud that eventually impacted global metals markets and roiled China’s economy. These two cases elucidate the complexity of China’s financialized commodity markets, the spatially variegated consequences of credit bubbles and the fragile foundations of China’s post-2008 growth.
Regulation, financialization and fraud in Chinese commodity markets after the Global Financial Crisis
The Chinese government’s 2008 fiscal stimulus resulted in a surge of liquidity flowing into the country’s shadow banking system. The paper focuses on two financing channels: the Fanya Metal Exchange and the commodity collateral financing market, which are paradigmatic for the unintended consequences of this credit bubble. The opacity of these markets and the assumption that asset prices would rise indefinitely incentivized widespread fraud that eventually impacted global metals markets and roiled China’s economy. These two cases elucidate the complexity of China’s financialized commodity markets, the spatially variegated consequences of credit bubbles and the fragile foundations of China’s post-2008 growth.
Regulation, financialization and fraud in Chinese commodity markets after the Global Financial Crisis
Engel, Jakob (author)
Regional Studies ; 54 ; 219-228
2020-02-01
10 pages
Article (Journal)
Electronic Resource
English
China , credit bubbles , commodities , financialization , Hyman Minsky , Katherina Pistor , B26 , B52 , K40 , Q02
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