China 's shadow banking system poses a serious risk to the country 's economy by siphoning off huge amounts of money , according to Bloomberg . In a recent note to clients , it estimated that the wealth management product ( WMP ) market is 24 % bigger than the country 's domestic stock market . If it grew at the same growth rate , as much as a third of retail funding activities in the banking system could be " off balance sheet " in two years , sucking liquidity from the real economy and triggering " a systemic risk event . The WMP problem is now so huge that it's starting to suck up cash lying around in the Chinese economy like a horde of locusts. " The unsustainable growth may result in a rise in debt , a fall of equity valuations and the flight of money to the US dollar , creating turmoil in domestic markets and worldwide volatility .
China 's shadow banking system poses a serious risk to the country 's economy by siphoning off huge amounts of money , according to Bloomberg . In a recent note to clients , it estimated that the wealth management product ( WMP ) market is 24 % bigger than the country 's domestic stock market . If it grew at the same growth rate , as much as a third of retail funding activities in the banking system could be " off balance sheet " in two years , sucking liquidity from the real economy and triggering " a systemic risk event . " The unsustainable growth may result in a rise in debt , a fall of equity valuations and the flight of money to the US dollar , creating turmoil in domestic markets and worldwide volatility .