Chinese banks sold US$2.5 trillion in wealth management products last year, according to today’s Chinese Financial News.
The average annualized return was 4.14%, which is a hefty negative real return with the CPI at 6.5% during the same period.
If the Chinese govt allowed locals to invest in international securities, there would be a massive outflow, with much of it heading into USD.
Maybe that’s a clue about how China’s government plans to unwind the $1.2 trillion of debt it’s holding.