Recently, Li Chao, vice head of the China Securities Regulatory Commission said in an internal meeting that there are some serious problems with the current debt security industry and he pointed out that the supervision of debt security industry will be further tightened up.

According to him, some of the major recent works include standardizing assets business management and compressing channel business scale.

ANBOUND's research team believes that these shadow credits lack of effective supervision; this increases the difficulty for decision-makers to accurately determine the true scale of social credits, and also decreases the stability of the overall credits, which in turn weakens the government’s liquidity control.

This also allows banks and brokerages being exposed to more risks.

The Securities Regulatory Commission stated that it will enforce stricter management on the industry, and requested the agencies to take initiative to sort out the system and the structural framework.

It is foreseeable that regulators will strengthen the management on shadow credits, including on asset management business to reduce the hidden risks.