May 31, 2004
China officially admits the top 4 state owned banks have bad (non-performing) loans of about 19% of all loans. Unofficially it is estimated at 40%. China is at the top of a decade long economic boom, and almost half of its bank loans have gone bad. Japan took a decade of economic stagnation to get even close. They officially peaked at about 8.5% of assets (loans) in March 2002.
What the hell will happen if China hits bad times?posted by Simon on 05.31.04 at 06:17 AM in the
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I won't call them "banks" because they actually serve as some kind of welfare agencies to the powerful and the well-connected. Many lending decisions are made based on political, not commercial, reasons. 19% bad loans sound about right to me. The industrial standard in the US is about 2%.posted by: m.c. on 05.31.04 at 10:34 PM [permalink]
thats pretty screwed up.posted by: pylorns on 05.31.04 at 11:17 PM [permalink]
19% my ass. If bad loans were actually at 19% the Party would declare a national day of celebration. 40% is absolutely more like it and it will be higher if the economic bubble deflates.posted by: Conrad on 06.01.04 at 09:01 PM [permalink]