here seems to be a shortage of cash in China. When the finance ministry auctioned off debt today (June 14), it found buyers for less than two-thirds of it—the first time in 23 months that it has failed to sell it all. Is it time to worry?
There have been other signs of a cash crunch recently. Interbank lending is flagging and the seven-day rates that banks charge to lend to each other have more than doubled in the past month. Expectations that the Chinese central bank will not cut interest rates yet, as other regional banks have, are also exacerbating the squeeze. There have been reports of banks struggling to find funds and reluctant to lend.