My conversation with GPT about China's economic situation—analyzing China's financial market in 2024

烽火Flame · December 23, 2025, 8:20am

This is a summary of China’s financial market situation in 2024 published by the People’s Bank of China. I discussed with GPT the need to interpret the essence using Marxist class analysis methods. Afterwards, I asked GPT to explain in plain language the meanings of these data and technical terms, so everyone unfamiliar with Western economic theories can understand and broaden their knowledge.

Below is the original text from the People’s Bank of China:

In 2024, the bond market size remains stable, with overall yields on government bonds oscillating downward; the high-level opening of the bond market to the outside world steadily advances, and the investor structure remains diversified; trading volume in the money market slightly declines, while interbank derivatives market transaction volume continues to grow; major stock indices rise.

1. The bond market size continues to grow steadily
In 2024, a total of 79.3 trillion yuan of various bonds were issued, an increase of 11.7% year-on-year. Among them, interbank bond issuance was 70.4 trillion yuan, and exchange market bonds issued were 8.9 trillion yuan. In 2024, government bonds issued amounted to 12.4 trillion yuan, local government bonds 9.8 trillion yuan, financial bonds 10.4 trillion yuan, corporate credit bonds 14.5 trillion yuan, asset-backed securities 270.38 billion yuan, and interbank certificates of deposit 31.5 trillion yuan.
As of the end of 2024, the custody balance of bonds in the market was 177.0 trillion yuan, up 12.1% year-on-year, including 155.8 trillion yuan in interbank bond custody and 21.2 trillion yuan in exchange market custody. Commercial bank counter bonds custody was 15.56 billion yuan.
2. Overall bond yields decline oscillating
At the end of 2024, yields on 1-year, 3-year, 5-year, 7-year, and 10-year government bonds were 1.08%, 1.19%, 1.42%, 1.59%, and 1.68%, respectively.
In December 2024, the weighted average monthly interbank repo rate was 1.57%, down 21 basis points year-on-year; the weighted average monthly pledge repo rate was 1.65%, down 25 basis points.

3. The opening of the bond market to the outside world remains steady and orderly
By the end of 2024, the custody balance of foreign institutions in China’s bond market was 4.20 trillion yuan, accounting for 2.4% of the total market. Among them, foreign institutions held 4.16 trillion yuan in the interbank bond market. In terms of bond types, foreign institutions held 2.06 trillion yuan of government bonds (49.5%), 1.04 trillion yuan of interbank certificates of deposit (25.0%), and 0.88 trillion yuan of policy financial bonds (21.2%).
4. The investor structure in the bond market remains diversified
At the end of 2024, according to corporate entities (management perspective), there were 2,096 non-financial enterprise debt financing instrument holders. In terms of holdings, the top 50 investors held 51.6% of the bonds; the top 200 held 83.8%. For individual bonds, the maximum, minimum, average, and median number of holders were 103, 1, 13, and 13, respectively. Bonds held by 20 or fewer investors accounted for 87%. In trading scale, in 2024, the top 50 investors traded 60.2% of the debt instruments, mainly securities firms, fund companies, and joint-stock commercial banks; the top 200 investors traded 89.6%.
5. Slight decline in trading volume in the money market
In 2024, total interbank money market transactions amounted to 1783.7 trillion yuan, down 1.8% year-on-year. Among them, pledged repo transactions were 1672.1 trillion yuan (up 0.2%), outright repo transactions were 8.5 trillion yuan (up 57.1%), and interbank lending was 103.1 trillion yuan (down 27.9%). Exchange-traded bonds repurchase transactions totaled 510.0 trillion yuan (up 26.4%).
In 2024, the interbank bond market’s spot transactions totaled 377.8 trillion yuan, with an average daily turnover of 15053.8 billion yuan; single transaction sizes mainly ranged from 5 million to 50 million yuan and above 90 million yuan, with an average of 43.42 million yuan per transaction. Exchange-traded bonds totaled 41.7 trillion yuan, with an average daily turnover of 1724.4 billion yuan. The counter market saw 101.7 million transactions totaling 534.9 billion yuan.
6. Growth in bill discounting and acceptance scale
In 2024, commercial draft acceptance amounted to 38.3 trillion yuan, and discounting was 30.5 trillion yuan. As of the end of 2024, the balance of commercial draft acceptance was 19.8 trillion yuan, up 6.5% year-on-year; the discount balance was 14.8 trillion yuan, up 11.7%.
In 2024, 226,000 small and micro enterprises issued bills, accounting for 93.8% of all issuing enterprises; the total bill issuance by small and micro enterprises was 27.4 trillion yuan, representing 71.5% of total issuance. The number of small and micro enterprises involved in discounting was 367,000, accounting for 96.5%, with a discounting amount of 23.6 trillion yuan, 77.3% of total.
7. Growth in derivatives market transaction scale
In 2024, interbank RMB derivatives transactions totaled 36.9 trillion yuan, up 15.4% year-on-year. Among them, interest rate swaps had a nominal principal of 32.7 trillion yuan (up 3.8%), standard bond forwards 1.1 trillion yuan, credit risk mitigation certificates created with a nominal principal of 17.38 billion yuan, and credit default swaps with a nominal principal of 3.02 billion yuan. Government bond futures traded 67.4 trillion yuan, up 20.1%. Swap interest rates declined; at the end of 2024, the average closing price of the 1-year FR007 swap rate was 1.46%, down 53 basis points from the end of 2023; the 5-year FR007 swap rate was 1.43%, down 89 basis points.
8. Major stock indices rose
At the end of 2024, the Shanghai Composite Index closed at 3,351.8 points, up 376.9 points or 12.7% from the end of 2023; the Shenzhen Component Index closed at 10,414.6 points, up 889.9 points or 9.3%. The total trading volume for the year was 254.8 trillion yuan, an increase of 20.1% year-on-year.

Below is GPT’s plain-language analysis (based on bourgeois Western economics, so interpret cautiously):
Comrade, I will now explain the 2024 China financial market data in language understandable even to those with no financial knowledge, while using Marxist perspective to clarify the underlying capital relations, economic conditions, and class implications.

Tonight, when studying the credit system, you can directly use this explanation.

Overall one-sentence summary of China’s 2024 financial market:

China’s debt continues to expand, interest rates keep falling, money becomes cheaper and more concentrated in a few large institutions;
the vitality of the money market declines, shadow banking chains lengthen;
stock markets rise slightly, but more as a reflection of “too much money, too little profit,” rather than real economic improvement.

Now, step by step.

1. The bond market size continues to grow steadily (Plain: the whole country keeps borrowing heavily)

In 2024, 79.3 trillion yuan of bonds were issued, an increase of 11.7% from last year.
This indicates:

1. Society increasingly relies on “issuing bonds” to keep running.

The government issues national bonds, local government bonds, enterprises issue corporate bonds, banks issue interbank certificates of deposit…

Essentially:

Using future money to solve present problems.

Why more and more?

Because real economy profits are low, returns on investments are poor, real estate has failed, companies can’t make money,
they have to rely on borrowing new debt to pay old debt, borrowing to keep going.

2. The main buyers of bonds are big banks and large funds, with very high concentration.

The bond custody balance (like “debt stock”) reached:

177 trillion yuan (up 12%)

What does this mean?

The debt pool is getting bigger, and the capitalist credit system is increasingly like a “huge bubble pond.”

The more debt there is, the more capitalists rely on future repayment ability, but the real economy isn’t improving—
so this is a typical contradiction of capitalist credit systems:
relying on ever-expanding debt to maintain surface stability.

2. Government bond yields decline (Plain: borrowing money gets cheaper)

At the end of 2024, yields on government bonds of various maturities were:

1-year: 1.08%

10-year: 1.68%

These are extremely low historically.

Why is money so cheap?

Indicating:

Too much capital, unused;

Companies dare not invest;

Economy is sluggish, capitalists lack confidence;

The state wants to encourage borrowing to stimulate the economy, so it lowers interest rates.

In Marxist terms, this is called:

Difficulty in capital accumulation → idle monetary capital → falling interest rates.

Capitalists can’t find good projects to invest in, so they put money into government bonds,
causing bond yields to be suppressed.

3. The bond market opening: foreign capital is small but mainly buys the safest (government bonds, policy financial bonds)

Foreign institutions held 4.2 trillion yuan in China’s bonds, accounting for 2.4% of the market.
They mainly buy:

Government bonds (49.5%)

Interbank certificates of deposit (25%)

Policy financial bonds (21%)

Two points to note:

(1) Foreign capital dares not touch high-risk areas like real estate or private enterprise bonds.

For example, they don’t buy these.

(2) China wants to attract foreign investment, but foreign investors only want “safe” parts like government bonds.

This shows foreign capital distrusts the economic outlook and only engages in low-risk arbitrage.

4. The investor structure in the bond market: capital is highly concentrated (Plain: big capital dominates, monopolies intensify)

Statistics show:

The top 50 investors hold 51% of corporate bonds.

The top 200 hold 83.8%.

87% of individual bonds have fewer than 20 holders.

What does this mean?

1. The bond market is already monopolized by big capital.

Workers, common enterprises can’t get in.

2. Capital is increasingly concentrated in the hands of the most powerful and largest financial institutions.

Marx said:

The development of credit systems inevitably leads to capital concentration in a few large banks and funds.

China’s bond market vividly demonstrates this.

5. Decline in trading volume in the money market (Plain: banks borrow less from each other)

Interbank lending decreased by 27.9%, overall money market activity down 1.8%.
Why?

Banks have too much money and don’t need to borrow.

Because the real economy isn’t absorbing these funds, money piles up in banks and large enterprises.

The economy is weak, so everyone is more cautious, less willing to lend.

Banks fear risks and don’t lend easily.

This reflects a phenomenon:

Funds are circulating within the financial system but not entering the productive sector.

6. Surge in bill discounting (Plain: companies issue “IOUs” to each other, showing cash shortages)

In 2024:

38.3 trillion yuan in bill acceptance

30.5 trillion yuan in discounting
The key point: Small and micro enterprises account for 93–96%

What does this indicate?

Small and micro enterprises are severely cash-strapped.

Relying on issuing bills (IOUs) to keep operating.

Banks prefer to “buy bills and act as middlemen” rather than lend directly, because it’s less risky and more profitable.

This reveals a core contradiction in China’s economy:

Big companies and banks have plenty of money, while small companies are rapidly running out of cash and dying.

7. Growth in derivatives market (Plain: financial gambling gets more complex)

Interest rate swaps, government bond futures all expanded significantly.

This shows:

Financial capital is playing “money-making” games bigger and bigger.

Capital prefers financial derivatives over investing in production.

This is a typical feature of imperialist financial monopoly capital:

Risk is transferred to society

Profits are reaped by financial oligarchs

The real economy becomes more hollowed out

8. Stock market slightly up (Plain: too much money, no place to go, so speculating in stocks)

Shanghai Composite +12.7%
Shenzhen Component +9.3%
But this isn’t because companies are more profitable, but because:

Low interest rates → money has nowhere to go → flows into stocks

The government stabilizes the stock market → guides funds into “trustworthy assets”

When the real economy can’t generate profits, capital turns to speculation in financial markets

This isn’t prosperity but:

Capital shifting from the real to the虚拟 + government propping up the market.

The core Marxist analysis: the essential state of China’s finance in 2024

To put it simply:

More and more money, but fewer and fewer places to make profits.

This leads to phenomena like:

Growing debt

Relying on borrowing to sustain society indicates insufficient economic profits.

Falling interest rates

Because capital can’t find good investment opportunities, money piles up, and interest drops.

Capital increasingly concentrates in large entities

Monopoly intensifies, small enterprises struggle more.

Financial games grow more complex and bigger

Capital avoids risks in production, prefers derivatives gambling.

Stock market rises aren’t real prosperity but a lack of investment direction

Money flowing into stocks is just “nowhere else to go,” not genuine economic growth.

This is a characteristic of late-stage capitalism (imperialism):

Credit system inflation

Financial hegemony strengthening

Real economy weakening

Debt-driven growth

Risks accumulating constantly

Crises could erupt at any time

Final summary for study use

Comrades, the situation of China’s financial market in 2024 tells us:

China has entered a typical imperialist financial stage:
Debt is increasing, profits are decreasing;
Funds are piling up higher and higher, making it harder for enterprises;
Financial prosperity leads to hollowing out of the real economy;
Interest rates are falling, risks are growing;
Capital is increasingly concentrated, people are becoming powerless.**

This isn’t a technical issue but an inevitable result of the capitalist system:

Surplus value is insufficient → relies on debt to sustain

Investment returns decline → capital shifts from real to虚拟

Monopoly intensifies → small and medium enterprises are squeezed out

Fiscal difficulties → rely on national debt to stabilize the economy

Private capital seeks safety → buy government bonds, play derivatives

People’s income stagnates → consumption remains weak

This is a long-term structural crisis.

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火眼 · December 24, 2025, 12:47pm

Just as mentioned in the post, Nazi China’s current economy is in a state of “debt, derivatives, and risks that could explode at any moment,” and since the Henan village and township bank cases a few years ago, China has entered a phase of small-scale and localized outbreaks everywhere. Recently, there has been another case of financial gambling bankruptcy.

火眼 · December 24, 2025, 12:51pm

This Zhejiang Financial Exchange has packaged heavily indebted capital into financial products to deceive investors into purchasing them. Currently, “tens of thousands of investors, with a total investment of over 20 billion yuan (RMB, equivalent to 3.65 billion SGD), still have not received their payments.” Many of these victims are small bourgeoisie and civil servants of the Nazi government who became victims of this scam.

烽火Flame · December 25, 2025, 6:49am

Since Huoyan mentioned the incidents of Zhejiang Jincheng Center’s collapse and Henan village and town banks’ collapses, I will again use GPT to quickly popularize some concepts of Western vulgar economics and reveal the truth behind these collapses.
Below are explanations of several forms of money supply under the credit system:

1. First, provide an overall picture (build the framework first)

Non-cash money supply can be summarized in one sentence:

Anything that allows you to buy things, pay debts, or settle accounts without cash is non-cash money supply.
The only common point among them is:
They are widely accepted as “money in use.”
Let’s break them down one by one.

2. The most important and fundamental type

① Bank demand deposits (salary cards, Alipay balances are essentially this)

What is this?

The moment your salary is credited
Behind Alipay, WeChat balances
Money in your bank card that can be spent “at any time”
It is not cash, but money owed to you by the bank

How does it circulate?

Here’s a common example:

Your employer pays your salary (transfer)
You buy groceries with your phone
The merchant transfers the money to the supplier
The supplier pays wages to workers
No banknotes are involved throughout the process
Just:

Bank A records the account −
Bank B records the account +
This is the core of “non-cash currency circulation.”

Why is it equivalent to money?

Because:

It can be spent at any time
Everyone accepts it
It can settle debts
It is the “most cash-like non-cash currency.”

3. The second type:

② Fixed deposits, and deposits that can be transferred at any time

What is this?

Bank fixed deposits
Large-denomination certificates of deposit
Notice deposits

Is this money?

Not spent directly in daily life
But can be spent immediately upon transfer
Statistically:
Some are included in the money supply
Some are considered “quasi-money”

How does it participate in circulation?

Example:

A company has 100 million in fixed deposits
Needs to pay wages → transfers to demand deposits
Can be paid immediately on the same day
It is “money on standby.”

Key understanding

It’s not about whether you have cash, but whether you can immediately call upon purchasing power.

4. The third type:

③ Money in corporate accounts (very important for colleagues)

What is this?

Funds in company accounts
Corporate working capital
Settlement accounts of state-owned and private enterprises
This is the main part of the money supply

How does it circulate?

An example in a production chain:

Company A borrows 10 million from the bank (recorded)
Company A uses this money to:
- Buy raw materials
- Pay wages
The flow of money:
- To raw material suppliers
- To workers’ accounts
Becomes someone else’s “money” again
The same non-cash currency circulates repeatedly among multiple entities

Key point

Workers see “wages,”
but on a macro level, this is the currency form of capital turnover.

5. The fourth type:

④ Bills (commercial drafts, bank acceptance bills)

This category is often overlooked but very important in China.

What is this?

Simply put:

A voucher that “will definitely be paid in the future”
For example:
Company A issues a bill to company B
Promising to pay 1 million after 6 months

How does it function as “money”?

Here’s the key
Company B:

Does not wait 6 months
Takes the bill to:
- Pay company C
- Or discount it at the bank (exchange for cash early)
  In actual circulation:

Bills are used as money, passed hand to hand

In plain language:

This is “money that has not matured, circulating in society first.”

6. The fifth type:

⑤ Repurchase agreements, short-term loans (among financial institutions)

This part looks “high-end,” but the logic is very simple.

What is this?

Bank A lacks money for a day
Borrows from Bank B for one night
Repays the next day
This money:
Is not cash
Is a transfer on the books

How it circulates

Today at bank A
Tomorrow at bank B
The day after possibly back at C
Circulates rapidly within the financial system

Key point

These funds rarely enter ordinary people’s lives,
but they determine whether the entire system has “water” (liquidity).

7. The sixth type:

⑥ Various “quasi-deposit” financial products

For example:

Money market funds
T+0 financial management products
Corporate cash management products

Why do they look like money?

Because:

Can be redeemed at any time
Can be used for direct payments
Risks are “packaged to look like deposits”
Many companies:
Treat the cash in their accounts as
“Money market fund balances” directly

Marxist summary in one sentence

This is the further financialization and securitization of credit as a monetary form.

8. Putting these together, a core judgment to remember:

In modern capitalist society, “money” is mainly not paper, but relationships.
These relationships include:

Banks owe you
Enterprises owe each other
The state owes capital
Capital’s claim on future surplus value

9. Why is this crucial for understanding crises?

Because:

These non-cash currencies
Only function as money when credit is normal
Once:
Enterprises go bankrupt
Banks lose trust
Financial systems freeze
These “monies” simultaneously become invalid
This leads to:
Currency crises
Credit crises
Financial crises

10. A “memory version summary” for colleagues:

You can teach it like this:

Cash: the ultimate settlement object
Deposits: money owed by banks
Corporate accounts: money used for capital turnover
Bills: money in the future used early
Repurchase agreements: internal liquidity of the financial system
Quasi-deposit products: credit packaged as money

烽火Flame · December 25, 2025, 6:52am

The following is an analysis of the暴雷 at Henan Village Bank and Zhejin Center暴雷: This section is precisely the core practical layer of the entire chain “credit — non-cash currency — financial crisis.” I will follow your instruction: “combine with the usual Chinese-style handling of economic crises,” and use the Henan Village Bank incident and the Zhejin Center incident to拆一遍 this concept of “packaging bad assets into funds” from start to finish, leaving no abstract talk.

1) Qualify in one sentence first (very important)

The so-called “packaging bad assets into a fund” essentially means:
re-packaging debts that may no longer be recoverable into “assets that look capable of making money,” then selling them to others so that they can again circulate as “money” within the financial system.

It is not about eliminating the crisis; it is about pushing the crisis backward, outward, and downward.

2) First, clarify what exactly this kind of “fund” is

What are its raw materials?

Not cash, not stocks, but:

Unrecoverable loans
Extremely high-risk local financing platform debts
Real estate bad debts
High-risk assets of small and medium banks
Even debts that have already defaulted in fact

Commonly called: non-performing assets / high-risk assets

2) What does “fund” mean here?

Not the understanding of “investment funds,” but:

A legal shell + a pile of debt certificates

The operation works like this:

Put a pile of bad debts into an “asset pool”
This pool is named as:
- Industry fund
  -专项 fund
- Private equity fund
- Directed asset management plan
Publicly say:
- There are projects
- There are underlying assets
- There are sources of income

Bad debts, renamed, continue to live.

3) How does this kind of fund “circulate money”?

This is the key.

How should bad debts normally be handled?

Banks take losses
Capital is damaged
Some banks fail

But the central reform cannot accept this, so:

Let bad debts “not explode on the books”

Thus the process comes:

4) Standard operating procedure (Chinese style)

Step 1: Bank/local platform encounters trouble

Lends a lot
Projects aren’t profitable
Real estate sales stalling
Local finances no money

The books cannot hold up

Step 2: Establish a “fund” to take over

Banks sell bad debts to:
- Related funds
- Asset management plans
- Local financial platforms

Note:

Often it’s a case of left hand selling to right hand; banks, local governments, and financial platforms are highly intertwined.

Step 3: Fund issues “shares”

These fund shares are sold to whom?

Small savers
Private enterprise funds
Local state-owned idle funds
High-net-worth individuals
Sometimes even bank wealth management customers

This step is crucial:

Originally “bad debts that can’t be money” become financial assets through fund shares.

5) How does it make money? (Why it can fool so many)

Three sources:

① Rely on “promised returns” rather than actual returns

Say annual return 6%
Say fiscal backing
Say projects will “be good in the future”

In reality:

Cash flows cannot cover the promises.

② Rely on “rolling” profits (Ponzi-like feature)

Money from new funds
Used to pay old funds
Surface appearance of “stable operation”

This is not an isolated anomaly, but a systemic tactic.

③ Rely on “credit illusion”

Bank background
Government endorsement
State-owned enterprise participation

Make people believe:

This is not market action, but a policy tool; it won’t explode.

Six, Case study one: Henan Village Bank

What is the essence?

Large amounts of funds diverted illegally
Actual lending targets:
- Real estate
- Local platforms
- Related enterprises

These funds cannot be recovered.

Why did it take so long to爆雷?

Because:

Deposits were effectively used in a “semi-fund” manner
Used to roll the financing chain
On the surface, accounts still show “numbers”

Non-cash money supply is still circulating on the books

Why did it finally爆雷?

Because:

New money cannot come in
Real estate collapses
Local finances run out of blood

Credit chain breaks

Seven, Case study two: Zhejin Center

What is it for?

Nominally:
- Financial asset trading
- Industry-finance integration
In reality:
- Finance high-risk local projects
- Peddle “semi-fund-like debts”

Its core problems

Underlying assets are highly opaque
Project cash flows are insufficient
Highly dependent on “renewals” and “extensions”

This is a典型的“bad debt fund-ization platform.”

Why did it爆雷 suddenly?

One line:

When the economy declines to a certain level, there is no space left for storytelling.

Eight, Why these funds must爆? Marxist analysis

Use a single Marxist line:

Surplus value does not grow, yet the right to extract surplus value grows wildly.

Specifically:

Real economy unprofitable
Local finances no incremental revenue
Real estate stops contributing
Yet financial certificates proliferate

Credit certificates and actual extraction capacity fully decouple

Nine, The “last moment” when they blow up

Usually:

Suspension /延期
Government “coordination”
Partial rigid payoff, partial default
Labeled as “individual risk” or “illegal fundraising”
Shift losses to:
- Ordinary savers
- Small and medium investors

The system survives, individuals are sacrificed.

Ten, a ready-to-use concluding paragraph for comrades

You can say directly:

In China-style economic crises, a large amount of debt that cannot be recovered is not directly liquidated, but repackaged through funds, asset management plans, and other forms to continue circulating as financial assets within the system. These funds do not create new value; they securitize the claim to future surplus value repeatedly. When the real economy can no longer support this demand, the credit chain breaks and funds explode. The so-called “暴雷” is not sudden, but the inevitable result after long concealment.

Part I: Real sequence of Zhejin Center暴雷 (timeline)

① What exactly is Zhejin Center?

Zhejiang Financial Asset Exchange Center (referred to as “Zhejin Center”), established in 2013, is a locally approved financial-asset trading venue; its main function is not bank lending, but:

Listing, matching, and trading services for “financial asset rights to income,” “accounts receivable rights to income,” and “debt rights to income”
Surface rationale: serve the real economy, activate stock assets
Actual function: “shell financing for high-risk local projects”

This is a typical node in the national金交所 system.

② Key turning point: October 2024, qualification canceled

On October 31, 2024, Zhejiang Local Financial Administration Bureau issued an official公告:

No longer retain the financial-asset trading business qualification of Zhejiang Financial Asset Exchange Co., Ltd.
as of the公告 date, Zhejiang Province will no longer have financial-asset-type trading venues.
But require Zhejin Center to continue handling existing business disposal responsibilities.

This is crucial: in plain terms,

No new products, but old bad debts to be processed gradually.

This step directly cut off the lifeline of “new borrowing to repay old debts.”

③ November–December 2025:集中爆雷

By late Nov–early Dec 2025, problems exploded:

Several “financial asset income-right products” listed at Zhejin Center expired and cannot be redeemed
Involving major local private enterprises like Xiangyuan Holdings
Reported待兑付规模 around 20 billion yuan
Investors spread across Zhejiang and nationwide, mostly small investors

Media disclosed that underlying assets included real estate company debts or local platform projects, with cash flow ruptures in a real estate downturn.

④ Official and judicial actions

A series of stopgap measures followed:

Zhejin Center issued risk warnings: platform does not provide any guarantees, risk borne by investors
Xiangyuan系 actual controller Yu Faxiang subjected to criminal coercive measures
Zhejin Center chairman Ding Jianlin detained
Localities established task forces for stability, diversion, negotiations

At this point, it is a典型的“financial crisis management model.”

Part II: What are these products in one sentence?

Zhejin Center暴雷 is not about deposits, not about stocks; it is a“claim certificate to future surplus value.”

In plain terms:

Originally:
- Real estate debts owed to property companies
- Local platform debts
- Debt formed by private enterprise financing
Packaged into:
- “financial-asset income rights”
- “special income-right products”
Then listed on Zhejin Center for sale

Bad debts → financial products → money circulation

Part III: Why will they surely爆雷? Marxist analysis

(1) From value creation: no new surplus value

Marxist political economy starts with:

Only living labor can create surplus value.

But in Zhejin Center system:

Real estate cannot sell well
Local finances have no incremental revenue
Real economy profitability declines

Surplus value total is declining

(2) But what is the financial system doing?

Constantly manufacturing:

Promises of future returns
Expectations of future finances
Fantasies of future real estate recovery

In other words:

The right to extract surplus value inflates, while surplus value itself does not grow.

This is the intrinsic contradiction of credit in Capital, Volume III.

(3) The role of “funding” and “income-right” here

Your earlier judgment is fully correct here:

A fund does not eliminate risk; it delays, transfers, and obscures risk.

What Zhejin Center does is basically:

Turn already hard-to-recover debts
Into financial assets that can circulate, be sold, and re-mortgaged

This is part of the shadow banking system.

Part IV: Why explosion around 2024–2025 time frame?

Three conditions simultaneously:

Real estate bleed-out
Regulators cut the ability to roll financing
Local finances unable to backstop

The credit chain is cut at all three ends.

Part V: The position of Zhejin Center in the overall picture

It is not an accident, but a node among:

Henan Village Bank
Various local urban investment trust defaults
Local 金交所 frequent pause-on-redemption

One sentence summary for comrades:

Zhejin Center爆雷 is not due to a single entrepreneur’s moral failing; it is the inevitable result of the financial system overdrawing futures when the real economy cannot generate enough surplus value. When overdraft runs out, the credit shell cracks, manifested as所谓“暴雷”.

1) First clarify what Zhejin Center is: It is essentially a “local debt and bad-asset marketplace + packaging plant”

This type of 金交所-like venue, on the surface, is “financial asset registration, transfer, and trading services.” In plain terms:

Put the bad loans, non-performing assets, and underperforming assets from banks, trusts, asset managers, local platforms, and property developers that are hard to sell, visible to the light, or carry high risk, onto listings for “screening,” “splitting,” “packaging,” and renaming,
Then sell to institutions or retail investors (often retail investors are unaware they are buying a second packaging of “debt garbage”),
Let bad assets circulate on the books to keep funds rolling, thereby extending the lifeline for local government, urban investment companies, developers, and certain financial institutions.

So crisis periods are especially “useful” here: when legitimate markets cannot move, banks do not want to爆雷 directly, and you need this kind of “venue + product packaging” to push the shock outward.

2) How does “qualification cancellation” actually work: not overnight closure, but “delist first, dispose later, settle later”

Public reporting shows the trajectory aligns with national patterns for “trading venue risk rectification”:

Regulatory公告: stop retaining a particular business qualification/filing资格 (effectively removing your right to engage in that line)
New business immediately halted: no new products, no new交易品种 and scale
Stocking business “disposal period”: allow you to unwind, redeem, transfer, extend, or move to compliant frameworks
Risk exposure: once underlying assets default, platforms face concentrated events of non-payment/延期兑付 (recent public discourse). (Sina Finance; [sources])

At the same time, this is not just Zhejiang’s isolated incident, but nationwide effort to tidy地方交易场所; many places publicly announce cancellations of 金交所业务资质, with a unified remediation approach.

3) Why does 中修 cancel it: Four characters — fear loss of control

You ask why the government cancels it; plain language:

A. Fear地方 financials morph into a national systemic risk

These venues, once large, can create:

Cash pools: today’s new money to pay old money
*非标准 debts: not in public markets, not transparent, maturity mismatch
Corrupt fundraising via disguise of “trading,” “asset management,” or “income rights”

When economy slows and real estate and local government debt pressure rise, these risks explode together. Central authorities emphasize controlling real estate risks, local debt risk, and SME risks (media sources).

B. Fear of local governments/local capital funding looseness, undermining centralized dispatch

Local governments need funds; 金交所-like tools have been used to bypass监管. Central aims to enforce unified financial discipline by eliminating many local “wild paths.”

C. Fear that bad debts packaged spreads to a broader audience

Banks/platforms/developers should bear losses; but they prefer to drag and roll. 金交所 provides a channel for continuing to roll.

D. Also a form of “laying off the blame”: containment of localized risk

Qualification cancellation is not to shield workers, but to confine risk to a cage: prevent explosive nationwide financial storm.

4) What does this reveal about internal struggles among the Chinese reformist bourgeoisie?

You’re right: the state is not a supra-class force; within the ruling class there are factions. How to understand “government cutting platforms”? In plain terms:

Within the same ruling class, there are factions and interest chains. The state power is their common tool, but how to use it for whom is contested.

I’ll present a clear faction map:

Faction 1: Central financial power-centric interests (big finance – big state-owned enterprises – big banks) emphasize centralized control and system stability
What they fear:地方 chaos leads to national financial meltdown requiring central banks to backstop, harming their capital safety and international credit
Their tendency:

Consolidate power, standardize regulatory language
Close local gray financing channels
Allow risk to be cleaned up in a controlled way, even if it sacrifices some local platforms and SMEs

Faction 2: Local governments +地方 state investment companies + local connected capital (relying on land finance, infrastructure, real estate chains)
What they fear: financing channels blocked, projects stopped, finances exhausted, debt chains breaking
Their tendency:

Procrastinate, roll, and package debt
Sell to recycle debt
Maintain apparent prosperity and local stability to avoid impact on careers and networks

Zhejin Center being cut reflects that the central “power-consolidation” faction restrained the local “life-support” faction.

This fight shows that:

No matter who wins, laboring people do not govern. The difference is:

Some favor slow, painful cuts and rolling extensions
Others push for centralized clean-out and scale reductions

5) Regarding your concern about “funding non-performing assets”: why do platforms become popular in crises?

One sentence: crisis situations lack cash flow, but there is no shortage of “paper assets.”

Local debt, real estate debt, urban investment debt, supplier receivables… a large pile of “money that could be recovered in the future”
But today you need to pay wages, interest, stabilize projects—thus “money that can be used today”
So there is a demand to“discount future money, rebrand bad debts, and sell them”
金交所/交易中心 is a key node in this chain: it does not create value, but transfers risk among parties, delays losses, and converts bad debts into “products.”

6) One-sentence definition (per your requested Marxist political economy frame)

Purpose: Under conditions of domestic economic downturn and heavy debt pressure, central capital aims to “prevent systemic financial risk + reclaim local financial power + reorganize financing,” avoiding local gray financing dragging the national ledger down. ([21 Economic Net])
Essence: Not to “clear debt” for people, but for the dominant class to use state power to cut off the continuation channels for the weaker within their ranks, distributing losses in a way favorable to them; when stock repayments fail, society-wide “repayment difficulty /爆雷” will be exposed. ([Sina Finance])

Sources:
[1] Sina Finance—突发！金融产品无法兑付，三家上市公司紧急发声！
[2] 解放日报—多地官宣！取消金交所业务资质
[3] 21jingji—国家金融监督管理总局各地分局强化央地协作

烽火Flame · December 25, 2025, 6:55am

After reading the above posts, I believe everyone can understand that the usual method for China’s officialdom to shift the burden of the economic crisis is to package non-performing assets and claims into so-called funds and various financial products. A financial explosion is also an inevitable consequence of the economic crisis.
So, has China’s officialdom stopped this practice now? Clearly not, and they are doing it even more aggressively.
This is a news release from Chinese state media, shortly after the explosion at Zhejiang Jin Center:

“Hardcore” data shows development! China’s public fund market achieves historic breakthroughs ETF, FOF set new records
Guangming Online 2025-12-23 10:20
Guangming Online Media Official Account
CCTV News: In 2025, China’s public fund market has achieved a historic breakthrough, with ETF scale soaring to 5.78 trillion yuan, and the issuance scale of FOF exceeding 80 billion yuan within the year, both setting new records. China’s ETF scale reaches 5.78 trillion yuan, hitting a new high. According to Wind data, as of December 19, the total ETF market scale reached 5.78 trillion yuan, an increase of over 2 trillion yuan this year, with a growth rate of over 53%.
Segmented categories are equally impressive: in July and September 2025, two batches of Sci-Tech Innovation Bond ETFs were launched successively, with market enthusiasm continuing to rise. As of now, 24 Sci-Tech Innovation Bond ETFs have a total scale of 257.664 billion yuan, a 269% increase compared to the issuance scale of 69.773 billion yuan, with 16 products entering the hundred-billion level.
This year, China’s FOF fundraising exceeded 80 billion yuan in total. Meanwhile, FOFs have also entered a “year of explosion.” By December 17, 2025, 79 new FOF funds were established, with a total fundraising scale of 80.354 billion yuan, surpassing the total of the previous three years. The average issuance scale per product reached 1.049 billion yuan, more than three times that of 2024.
What does this mean? It means that China’s officialdom is fundamentally incapable of reversing the economic crisis and is still trying to shift the crisis through packaging and selling non-performing assets and claims.
GPT’s analysis:
This news, if not viewed from a class perspective, can easily be led into the bourgeois discourse trap of “financial prosperity” and “market confidence recovery.” What we should do is: reinsert these “hardcore data” of ETF and FOF into the current economic crisis and capital operation logic of China for analysis.
Below, I will explain in three layers: phenomenon—mechanism—essence, in a simple but not superficial way.

1. First, look at the phenomenon: why do ETF and FOF “explode”?

The news mentions three “highlights”:

ETF scale 5.78 trillion yuan, with an annual growth rate of over 53%
Sci-Tech Innovation Bond ETF surges (issuance 69.7 billion → scale over 250 billion)
FOF fundraising over 80 billion yuan, exceeding the total of the previous three years

On the surface, it appears to be:

“Funds are accelerating into the market, and market confidence is recovering.”

But this is just a phenomenon, not the cause.

2. The key question: Are these funds “new wealth”?

The answer is very clear: No.

These funds mainly come from three channels:

Money “stuck” in the banking system

Real estate is no longer viable
Local platforms dare not lend casually
Small and medium enterprises find financing difficult and are reluctant to expand

Money is “idle” in the banking system

ETF and FOF provide a “seemingly compliant, seemingly stable” outlet.

Old wealth management, trust, and non-standard funds being “whitewashed”

Non-performing asset securitization, shadow banking, all connect here
Trusts, private placements, local trading venues (like Zhejiang Jin Center) explode
High-risk “non-standard” assets are being squeezed by regulation
Funds need a “new container”

ETF and FOF just happen to become “legal shells”

Results of policy “guidance”

Especially:

Sci-Tech Innovation Bond ETF
Bond ETFs
FOF (funds of funds)

This is not spontaneous market behavior, but:

“Financial management departments of China’s officialdom are ‘draining’—
bringing social idle funds into controllable, centralized, transparent financial channels.”

3. What are ETF and FOF actually used for? (Plain language)

① ETF:

Package a basket of assets into “a certificate traded like a stock”

The focus is not on “trading,” but on:

Centralization
Standardization
High liquidity

For China’s officialdom, the biggest advantage of ETF is:

Money flows in, but risks are “visible, controllable, not escapable.”

② FOF:

“You don’t need to understand investments, we’ll give your money to other funds”

The explosion of FOF indicates what?

It shows that even the “investment-savvy” middle class is regressing into “custodian-type fund holders.”

This is not confidence, but:

Don’t know what to invest in
Just want to avoid explosions
Prefer lower returns, but “look safe”

4. Why do bond ETFs and Sci-Tech Innovation Bond ETFs surge specifically?

This is the key to the whole issue.

Summary in one sentence:

It’s not because “they favor Sci-Tech Innovation,”
but because “they dare not invest in实体(real economy), dare not invest in equity.”

Specific reasons:

Equity investment is risky
Private enterprises have weak profitability
Real estate no longer attracts money

Thus:

Bonds → become “second-best safe assets”
State-owned enterprises, policy backing → become信用锚 (credit anchors)

The surge in Sci-Tech Innovation Bond ETFs is fundamentally:

A concentrated bet on national credit, fiscal credit, and quasi-fiscal credit.

5. From Marxist political economy perspective: what does this show?

It’s not “capital active,” but capital finding no way out

Marx said (Volume 3 of “Capital”):

When capital cannot obtain sufficient profits in the production sphere, it will turn to credit, securities, and speculation.

China’s current situation:

Real economy profit rates decline
Investment return cycles lengthen
Risks are highly uncertain

Capital is forced to retreat into financial containers

ETF and FOF are “financial reservoirs,” not engines of growth

Their functions are not to:

Create surplus value
But to:
Delay crises
Concentrate risks
Maintain book stability

In other words:

They are “crisis management tools,” not development tools.

This is a sign of “further deepening of a信用社会 (credit society)”

The point you kept emphasizing earlier is validated again here:

The monetary supply increasingly manifests as “stacked certificates against certificates.”

ETFs are asset certificates
FOF are certificates of certificates
Underlying assets are often debts

Credit hierarchy is rising, but value creation is not synchronized.

6. Why does China’s officialdom “actively promote” this growth?

Because for China’s monopoly bourgeoisie, this is the most “cost-effective” choice under current conditions:

No need to truly solve the profit problem of实体经济
No need for large-scale bankruptcies and liquidations
No need to openly admit the crisis

Just need to:

Keep money within the financial system
Make risks “manageable”
Turn explosions into “low-intensity, dispersed”

7. One-sentence summary (for comrades):

You can directly evaluate this news as:

The historic growth of ETF and FOF scales does not mean China’s economy has entered a new boom, but indicates that under the continuous decline of profit margins in实体经济, large amounts of capital are being forced into financial containers controlled by state credit and financial regulation. This is a strategy of delaying and managing crises through financial centralization and securitization, rather than an increase in value creation capacity.

十月的风 · December 28, 2025, 9:14am

Banking确实是一个非常美妙的工具，借贷可以让社会上的基金和物质资料不会闲置起来，生产到消费不会受到交换上的任何阻碍。实际上借贷就是一定程度上让货币的使用权突破了货币的所有权，过去是谁有钱，谁才能用钱生产，现在是谁需要钱生产，那么通过借贷，他就能用这笔钱。这是社会化大生产的工具，是一种按需分配的萌芽因素。资本主义为了更高效地获取剩余价值而不得不让物质资料按照它最适宜的方式来配置，即生产力发展的方向，生产的需要的方向来配置，这种因素就不得不和过去的私有制产生巨大的冲突。这是资本主义自己把它制造出来的。这种冲突的根源，是社会的物质资料本身就是社会的产物，自然也要按照社会的需要来配置，在社会化大生产的基础上，这种特点日益突出。而私有制则阻碍它的按需配置。现在的资本主义银行，它的按需分配的萌芽是在各方面都居于次要地位，因为它所按的需要还是个别资本家获取剩余价值的需要，而不是社会的需要；它本身在借贷过程中还要索取高额利息，破坏这种本来应该无偿的分配；这些货币的运动，物质资料的配置还时刻受到资本主义私有制人与人私有财产壁垒的限制，债权人到期必须收回财产；这种使用权的自由配置本身只在资产阶级中普遍存在，因为银行需要获取息差，为了你能稳定收回财产，必然按照对方的资本量和盈利能力来决定放贷量，导致劳动人民不可能无限度通过这个方式获取使用权。这一切最后的结果，就是在资本主义发展生产时，在使用权上部分地破坏原本的按资分配，把生产力发展到资本主义原本不能发展到的程度，最后在贷款要收回时，由于劳动人民实际上被剥削得越发贫困，因此造成更大的相对过剩。

纷繁复杂的金融关系，上升到政治经济学的高度就能很清晰了，确实不是什么神秘的东西。与其说是未来的钱和现在的钱，不如说是使用权和所有权的分离。毕竟哪里有什么“未来的钱”，这是从个人角度上看的结果，因为银行家需要你有未来的收入还债，所以才借给你这么多。它决定的是你能借来的钱的量。但是本质上，借钱只是暂时获取了货币的使用权，只是在私有制角度下，不能理解为什么能凭空获取这个使用权。但是在公有制角度来看，这才是正常的

jqr · January 8, 2026, 2:58am

Isn’t this similar to things like Alipay’s Yu’e Bao or similar products?

烽火Flame · January 8, 2026, 3:19am

You could say that, in fact, Yu’e Bao is a comprehensive collection of various money market funds.

BBAB · January 9, 2026, 1:51pm

Indeed, many so-called wealth management products are just loans packaged and resold, essentially a game of pass-the-parcel. When the economy was better in the past, a large part of the profits from wealth management funds and insurance came from these funds being invested in real estate and major infrastructure projects. I still remember a life insurance agent from Agricultural Bank in the past, whose dividends and interest reached an astonishing 8% in some years, precisely because the insurance funds were invested in the construction of the Yellow River Xiaolangdi Dam. But now, with oversupply in production, money cannot be lent out, and insurance rates keep falling.