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Copper shadow economy in China

The constant struggle of the Chinese government agencies with the shadow economy as a whole and with the growth of the population of illegal lending in particular has led to quite unexpected consequences. As a collateral loan guarantees ordinary copper has been applied very active and some other materials are in demand and popularity in the industrial sector.

The result of this transformation of the credit system has become an ever-growing imports as pure copper and alloys with high-tech structural material in the country. As a result of the fact that an alternative credit system much more accessible to the broad masses of the population than the traditional, thanks to lower interest rates, China's copper imports already in the first half of 2013 rose by almost two times compared to the estimated period of last year.

Such a copper boom in the country of the rising sun has enough beneficial effect on the entire global economy. After all, the price of copper, which dropped significantly in the past few years, again there is a tendency of growth and stabilization. Although the Chinese government structure the economic growth of the world community can result in complete failure of combating shadow lending schemes. To date, the financial turnover of illegal credit structure has increased by more than twenty percent in comparison with last year's figures.

For borrowers copper circuit is much more favorable to the classic public offerings in the national currency. After all, the price of copper is expressed in dollar terms, interest rates that are lower than rates for the Chinese currency. By the way, lending rules in these banking institutions are constantly being tightened and officials before issuing debt capital required supporting documents on the import of material warranty. In this regard, significantly increased the demand for a variety of storage and utility rooms, which could be reflected in a rise in prices for the rental of these facilities. All the above transformation of the most affected small and medium businesses, large companies almost did not feel a significant financial discomfort. Recognized business leaders sometimes act as guarantors of the borrower's solvency smaller, which increases the rate of the loan amount. If this trend will continue to grow, the Chinese economy would suffer considerable damage.

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