Chinese banks shares have been hit today on the stock market, led by China Construction Bank (CCB), which fell by 2.95% in Hong Kong on the news that it is the biggest lender to Zhejiang Zhongjiang, which is going bust. Interestingly, three months ago we had a brief mention of Zhongjiang when one of its subsidiaries, Jinxing Property, filed for bankruptcy. This is another case that the risks in the shadow banking system of China is feeding into the formal banking system. Yicai reports that CCB was the biggest creditor of the company among the formal banking peers, which included Bank of China and ICBC. The total ... (full story)