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Strategies & Market Trends : Strictly: Drilling II
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To: Little Joe who wrote (20996)10/30/2002 9:15:56 PM
From: t4texas  Read Replies (1) of 36161
 
it is true, but nothing to be alarmed about.

"his underlying claims that 70% of all chinese bank loans to domestic businesses were were in nonperforming status."

i don't know about the 70% number, but most chinese bank loans to chinese companies are non-performing. then they loan them some more. almost all these loans are to chinese government companies. many of the companies are being shut down, but the bad loans are there. i just saw a deal where some broker (don't remember the name anymore, but morgan stanley, goldman sachs, or merrill syndicate, etc.) was the buyer of a huge chunk of chinese non-performing loans for about 10 cents or less on the dollar). all this sounds bad on the surface, but china has almost total currency control (yes, plenty large black market too.). china's four aces in its hand are that hard currency is coming in every day to do the world's manufactuing (the rmb is not convertible). hard currency is gotten by all the exports too. all those banks with the bad loans are also owned by the government. so the guys with the banks are also the guys with all that hard currency too. (of course those same guys have a lot of gold now too.). so don't get too worked up about bad loans the chinese banks have to the chinese govt. industries. it is all just a bunch of domestic rmb anyway.
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