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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (23473)	1/8/2004 6:58:39 AM
From: LindyBill	Read Replies (1) \| Respond to of 793622

I assume you didn't go to Beijing to invest in the banks, Mq. China looks to foreign investors as part of bailout plan for state banks The government will transform some of the state banks into public shareholding companies, paving the way for the introduction of outside investors, Liu Mingkang, chairman of the China Banking Regulatory Commission (CBRC), told Wednesday's edition of the China Daily. The report follows an announcement by the State Council Tuesday that it had injected 45 billion dollars from the foreign reserves into the Bank of China and the China Construction Bank to bolster their balance sheets. The bailout is only the first step in a government strategy that could see it pour as much as 100 billion dollars into the banking system as part of efforts to make banks solvent in preparation for a stockmarket listing, the Financial Times reported, quoting unnamed government officials. The amount and timing of additonal injections have yet to be decided. "The proposal was for more than 100 billion dollars to be earmarked for recapitalisation," a senior financial official told the Financial Times. Analysts have long speculated that Beijing will be forced to inject public funds to rescue the debt-ridden sector that for years handed out easy loans to China's money-losing state enterprises. The FT said that the Industrial and Commercial Bank of China will be the next to receive a tranche of the country's 400 billion dollars in foreign exchange reserves. Officials hope the cash injection will not only make the banks more attractive to foreign investors but also help reduce bad loan ratios to around 10 percent, a level that would at least allow a listing on the domestic or Hong Kong markets. Once the four banks, including the Agricultural Bank of China, have the "right conditions" in place for restructuring or issuing shares, the government will "especially usher in foreign companies as strategic investors", Liu said. Foreign investment in them will improve the banks' corporate governance, drive forward internal control reforms, improve their financial performance and strengthen their international competitiveness, he said. The CBRC has set a target of reducing the banks non-performing loan (NPL) ratio to 15 percent by 2005 from current official levels of around 23 percent. Regulators, however, are looking to accelerate reforms, namely tackling the NPL overhang, which economists estimate actually run at 40 to 45 percent at the four main banks, as the sector prepares to fully open up to foreign competition by end-2006 under promises made when China joined the World Trade Organisation. Separately, Standard and Poor's Rating Service upgraded the outlooks on the 'BB+' long-term foreign currency counterparty credit ratings of Bank of China and China Construction Bank to positive from stable. The fund injection, it said, could accelerate the two state banks' reform and help resolve problem loans but stressed further action was required to "underpin the longer-term solvency of the banking sector". It estimated NPLs account for about 45 percent of all loan assets in China's banking system. For its part, the Bank of China aims to reduce its NPL ratio to below 10 percent ahead of its planned domestic listing sometime in 2005, while the China Construction Bank is similarly trying to trim its bad debt burden. The Industrial and Commercial Bank of China and the Agricultural Bank of China are further away from gaining a listing but they are also expected to receive a similar helping hand, analysts said. news.yahoo.com

To: Maurice Winn who wrote (23473)	1/8/2004 10:06:04 AM
From: LindyBill	Respond to of 793622

China just won't face up to need to handle this openly. If they had, SARS would never have spread. January 8, 2004 - New York Times Police Raid China Newspaper That Reported New SARS Case By JOSEPH KAHN BEIJING, Jan. 7 - The police stormed the offices of one of China's most pugnacious newspapers and detained the top editor and six other officials in what many journalists regarded as retribution for aggressive reporting on a recent SARS case, employees said Wednesday. The newspaper, Southern Metropolis Daily, was the first media outlet to report on a fresh outbreak of Severe Acute Respiratory Syndrome in Guangzhou, the paper's hometown. The paper's investigation late last month prompted authorities to confirm that China had its first suspected case of SARS since the epidemic that petered out last summer. Southern Metropolis Daily also came under heavy political pressure last spring when it exposed the beating death of a migrant worker in police custody, a case that eventually led the central government to abolish longstanding rules that allowed police to detain migrants at will. Employees at the newspaper, part of the state-owned Nanfang Daily Press Group, said they were told that Cheng Yizhong, the chief editor, and six other executives of the paper's business department had been detained Tuesday and held for questioning on suspicion of financial crimes. Mr. Cheng was released Wednesday morning, the employees said. The police declined to comment. Authorities often investigate financial crimes at major state-owned companies only when political leaders have decided to punish people they consider disobedient or threatening. Employees said they interpreted the daytime detention of Mr. Cheng as a clear signal that the newspaper had exceeded the tight boundaries of press freedom and offended provincial officials. Journalists say that efforts to curtail aggressive reporting at the paper may be part of a broader national clampdown on the press. President Hu Jintao, who became the top state and Communist Party leader in China last year, was initially seen as more tolerant of press freedom than his predecessor, Jiang Zemin. Reporters and editors were enthusiastic about relative openness in the aftermath of last year's SARS epidemic, when top officials acknowledged that the cover-up of SARS and restrictions on media reporting may have contributed to the rapid spread of the disease. But in recent months propaganda officials have been forbidding discussion of a range of sensitive issues, like political reform, and some media experts say the pendulum has swung back toward media repression. Guangdong Province, a southern commercial center that was once seen as a haven for aggressive news organizations, has been in the forefront of the crackdown. Two other publications of the Nanfang Daily Press Group, the weekly magazine Southern Weekend and the daily 21st Century World Herald, were widely read around China for their probing reports on the growing wealth gap, environmental problems, and high-level financial crimes. But both were severely censured last year for running articles that crossed political boundaries. The 21st Century World Herald was later shut down. Southern Metropolis Daily earned a national reputation for tough reporting last spring, when it uncovered the beating death in police custody of Sun Zhigang, a college graduate who had traveled to Guangdong to find work. A court case that followed exposed widespread police abuses but also put the newspaper on shaky political ground, reporters said. Copyright 2004 The New York Times Company