It is certainly worth noting that China’s banking system has now surpassed the eurozone’s as the world’s largest by assets. Interestingly, while China’s GDP surpassed the EU’s economic bloc in 2011, the banking system didn’t get to that spot until the end of 2016, according to analyses by the Financial Times. As explained on the Financial Times website,
“The lag reflects Beijing’s increased “financial deepening” — the term for the growth of a country’s financial system relative to gross domestic product. This has been fuelled by an extraordinary increase in bank lending since 2008, when the government unleashed aggressive monetary and fiscal stimulus to buffer the impact of the global crisis. “The massive size of China’s banking system is less a cause for celebration than a sign of an economy overly dependent on bank-financed investment, beset by inefficient resource allocation, and subject to enormous credit risks,” said Eswar Prasad, economist at Cornell University and former China head of the International Monetary Fund. Chinese bank assets hit $33tn at the end of 2016, versus $31tn for the eurozone, $16tn for the US and $7tn for Japan.”
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