fredag 17. mars 2023

China Watches U.S. Banking Crisis

The banking crisis in the United States is being watched closely in China, where Silicon Valley Bank remains plugged into a vibrant but cautious innovation economy. The Chinese internet exploded with chatter over the weekend following SVB's collapse, the biggest for a financial institution since 2008. In the days after the U.S. federal government stepped in to save the bank's depositors, Beijing's banking authorities have also come out to assuage concerns about a wider spillover.

SVB's financial group owners have done business in China since the late 1990s, with offices in major coastal cities like Shenzhen and Hong Kong. Their main business is a 2012 undertaking with the Shanghai Pudong Development Bank, a 50-50 joint venture known as SPD Silicon Valley Bank, or SSVB.

Like its now-bankrupt California cousin, SSVB caters to China's tech startups and venture capitalists by giving them easier access to dollar funding. The bank hailed as the first of its kind in the country is safe for now. However, there may be less confidence in its risk-accepting business model going forward.