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China's shadow bank lending shows biggest jump since 2017

Local governments seek alternative funding for Beijing-led infrastructure drive

Shadow banking in China jumped nearly $70 billion in August after four months of declines. (Photo by Yusuke Hinata)

BEIJING -- China's shadow bank financing rose to the highest level in more than 5 years in August, as cash-strapped local governments looked outside the formal lending system to fund infrastructure investment.

Shadow banking assets, including entrusted loans and other nonbank lending products, rose by a net 476.8 billion yuan ($68.8 billion) in August, the most since March 2017, according to data from the People's Bank of China. This was the first net gain in five months, as repayments usually exceed new financing.

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