China's total social financing could reach 15 trillion yuan ($2.38 trillion) this year, representing 26 percent of the gross domestic product in 2012, a report from Barclays showed on Monday.
The share of bank credit in total social financing is now 55 percent, from 58 percent in 2011 and 70 percent in 2008, while that of debt financing has jumped to 14.3 percent, from 9.5 percent and 8 percent, respectively, the report showed.
Meanwhile, there are renewed concerns about the financial and fiscal risks associated with the rapid expansion of non-bank credit financing. Two types of risk are frequently mentioned. The first is risks from sizable trust and entrusted loans. The second is risks from a rebound in local government investment vehicles' borrowing from the bond market and trusts rather than from banks.
This year has seen a revival of trust financing after regulatory curbs introduced in mid-2010 muted activity. Trust sector assets under management had risen from 4.8 trillion yuan in 2011 to 6.3 trillion by the third quarter of 2012, with a significant amount of lending to developers or local government investment vehicles that can't access bank credit. More than 35 percent of trust assets represent funding for infrastructure and real estate construction. Property-linked trusts account for 677 billion yuan, or 11 percent of the total, according to the report.
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