Special report | Lending

We try harder

Without the banks’ baggage, shadow banks find it easier to oblige customers

IN AN ENORMOUS shed on the banks of the Yangtze, China’s longest river, a remote-controlled blowtorch cuts through a thick sheet of steel. A fountain of sparks spatters outwards, watched by workers in hard hats. The machine slowly carves out a crescent of metal about a metre across. Once quenched and cooled, it is piled up on the floor with hundreds of other steel shapes, ready for assembly.

The army of welders at the other end of the shed have to shout to be heard above the whine and crackle of their torches. They will gradually assemble the individual pieces into complicated lattices. When these grow big enough to weigh 150 tonnes, they will be moved from the shed by a crane and welded to others on the wharf outside. When these components reach 600 tonnes, an even bigger crane will lift them into an adjacent dry dock. About a year from now the piles of steel cut-outs will have turned into the Interlink Fidelity, a ship 180m long and 32m wide, capable of carrying 38,800 tonnes of grain or iron ore.

This article appeared in the Special report section of the print edition under the headline “We try harder”

The lure of shadow banking

From the May 10th 2014 edition

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