It appears China is worried about a boom in lending by the country's fast-growing "shadow banks," China created a cash crunch in June to squeeze their source of funding.
One unintended consequence, though, was a selloff in the country's $4 trillion bond market.
The selloff—triggered by banks selling bonds to raise cash—bolstered critics of China's financial system, who point to its bond market as an under recognized risk to the country as it struggles to control surging lending amid a weakening economy.
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A good reminder to be fully aware of the risks in international, and all parts, of your investment portfolio.
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