The Money Crunch in China

I don't think the PBOC actually engineered the money crunch. I think this came as a shock to them and to everybody else. To a certain extent, it's because a number of things happened at the same time. We started hearing talk of Fed tapering, which placed already liquidity constraints within China. There is increasing evidence that a lot of the money that is being disintermediated from the banking system are being used to fund projects that are simply unable to repay the funding.