FORTUNE – China's cash shortage has roiled markets over the past few weeks, as investors fear a liquidity squeeze across the nation's banks could hurt growth in the world's second-largest economy.
While that might likely happen, the credit crunch is actually a good thing for China and the rest of the world.
China's banking system is opaque, if not deeply troubled. Over the years a shadow industry has quickly risen: Banks borrow from each other at low rates, then lend to a mishmash of trust companies, insurance firms, leasing companies and other informal lenders, which in turn, make riskier loans to others.
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