In a new signal of a worsening financial crisis in China, Li Ka-shing – the wealthiest man in Hong Kong – is selling many mainland bank shares.

As Apollo News reported, the Li Ka-shing Foundation, a subsidiary of billionaire Li Ka-shing, reduced its holdings in the state-owned Postal Savings Bank of China.

The firm sold a total of 83 million shares, cutting its holdings in the lender to less than 11%.

If calculated at the closing price of 4.12 Hong Kong dollars on Oct. 3, the cash amount reached 340 million Hong Kong dollars ($43.3 million).

Business magazine Forbes said that the sale of bank shares reflects a financial woe in China. A rapidly increasing crisis began more than a year ago when Chinese developer giant Evergrande defaulted.

At that time, Evergrande, with liabilities exceeding $300 billion, announced its failure to meet interest payments to international investors. That announcement set off a series of domino effects.

After the debt crisis from Evergrande, the Chinese regime did not take prompt or radical action, and the crisis continued to spread.

The financial problems have caused China’s economy to weaken. And although the government is boosting infrastructure spending, the economy is unlikely to grow much above the 5.5% target that has been lowered this year.

With the shortage of credit, several Chinese real estate developers have halted their construction projects, leading to a wave of unfinished houses.

As a result, China’s steel industry has been inundated with a storm of uncompleted buildings. Some 29% of steel companies are on the verge of bankruptcy.

Li Ganpo, chairman of Hebei Jingye Steel Group, revealed that the entire steel industry is losing money, and there is no turning point in sight.

The government could have avoided much of the economic pain if it had acted immediately after Evergrande’s debt default.

For example, the authorities could provide money to the financial system and mitigate the losses they faced due to the developer’s failure. That would help restore confidence and ensure that the loans continue driving business.

Or China’s central bank could increase the flow of loans to the system, but it did not act. So the financial failure and fear of such failure spread throughout the financial system.

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