cross-posted from: https://hexbear.net/post/6778428

China has a kind of financial system that the world has never seen," says Victor Shih, director of the 21st Century China Centre at University of California San Diego. China has the largest banking system in the world – larger than the US, Europe and Japan put together, he adds.

That size, along with the amount of control Beijing exerts over state banks, gives it unique capabilities.

"The government controls interest rates and directs where the credit goes," Mr Shih says. "This is only possible with very strict capital control, which no other country could have on a sustainable basis