Economy – Mobilized savings undermine credit crunch

An estimated 120 billion US dollar worth of deposits has been flooding last in the economy, writes the International Herald Tribune today, quoting Tao Dong, chief China economist at Credit Suisse First Boston. That equals about three percent of all deposits in China.
The flood undermines efforts of the financial authorities in Beijing to slow down the economy, but might also challenge the traditional financial institutions. The so-called Wenzhou stir-fry is expected to shake world markets, because of China’s increased leverage in the global economy.