The banking sector in China is entering the phase of 'new normal'. In recent years, the increasing downward pressures on economy now reflect on the loan quality, the typical signs being the increased bad debt and the higher ratio of non-performing loan to total loan.

Anbound’s research team is of the view that taking certain factors into consideration, it is likely that the ratio of the non-performing loan might be higher than the publicly available data, and the deteriorating of asset in certain area might be worse than suggested by the data revealed.

China should stay on high alert on the possible explosion of the regional financial problems.