Chinese banks are backtracking from the Middle East after record exposure: Chinese banks lent a record $15.7 billion to Gulf states in 2025. Lending has quadrupled from 2024 and up +2,428% since 2022. Abu Dhabi National Oil Co., the UAE's biggest oil producer, was even preparing its first-ever yuan-denominated bond, which could have raised up to $2 billion. Now, those plans have been halted following US and Israeli strikes on Iran. Furthermore, several Chinese financial firms are reducing exposure to Middle Eastern debt, while Hong Kong and Chinese regulators have directed banks to review and report all regional exposure. China's Gulf lending boom is pausing.(The Kobeissi Letter)