Amazed to see that no-one has really answered the question as to why this is happening. It does have a basis in Reckless lending however the real problem is the shadow economy in China.
As many of you guys might know every country has a shadow economy the produces huge amount of revenues for individuals and the government alike however the activities are frowned upon.
In China the shadow economy focuses on 2 things.
1. Large scale lending for irrelevent property invesments.
As of 2014 approximately 80% of New build properties in China for the previous year were unoccupied.
The government has illegally subsidised large construction firms to build property to try and create jobs for 'the greatness of China' Last year they started to curtail their lending but upon doing so have found that These large corporations have so much power they can now maniplulate the publics perception of the Market and are therefore forcing the hand of the lenders.
2. The Banks themselves have been up until now been making huge amounts for lending under these government schemes and when the government asked them to stop lending they looked at their profit margins and basically said fck off.
The government has lost control of the banks and in losing control they have allowed this reckless shadow lending to continue at the detriment to a number of the other industries.
The conclusion is that we will fairly soon see a large interest rate slash so that the communist regime can retake control of the countries finances. Pushing huge numbers back into poverty and huge jobs cuts.
' And everyone who hears these words of mine and does not do them will be like a foolish man who built his house on the sand. 27 And the rain fell, and the floods came, and the winds blew and beat against that house, and it fell, and great was the fall of it'