Let me guess - About 10 - 12 years ago, Banks in China had extensive non-performing loans, almost all to "state enterprises" which were implicitly subsidized with loans and by other means.
Over the course of about 5 to 7 years, most of those state enterprises were reformed, merged, rationalized, or put on a profitiable path China's growth and a lot of hard work by managers and bankers.
So that a few years ago, China's non-performing loans NPLs had been considerably reduced, almost every bank was in better shape, their credit ratings were raised, and many banks were able to go public.
Now the banks have managed to get NEW NPLs ... during past few years of very high growth - essentially they found a way to make bad loans during a boom period.
I expect much if this commercial real estate, along with some new private companies, plus their old friends, the state enterprises.
I trust that the new NPLs are a much smaller percentage of the banks captial than the old problem - right ?
This should be a much smaller problem than the old non-competitive state enterprise problem.
Right ?
Okay, I am disapointed that no one - even China- seems to know how to play the capitalism game. |
