A closer look at the banking situation in China;
In 2002, Chinese officials admitted that 25% of the loans written by the state owned banks were non-performing. Standard and Poors and a number of others said it was closer to 50%, and possibly more. Within the space of four years, the Chinese administration has revised its estimation of the rate of non-performing loans down to an average of about 12%. How can this be done so fast? I’m not really sure. We are, of course, talking about the writing down or otherwise accounting for of many hundreds of billions of dollars of bad loans. I assume that it’s due to the fact that most or all of the bad loans have been transferred to special “asset management” companies set up by the government. I suspect that the banks have been able to revise their non-performing loans (NPL) ratio down so quickly by performing a debt-to-equity swap with these holding companies. The article linked to immediately above believes the asset management companies have taken a chunk of the banks’ loans and issued them with 10 year bonds in return.
Read it all.
h/t
The Chinese are able to report these numbers the same way the Russians would report the potato harvest. If the Central Committee said 500 tons of potatos left the farm then 500 tons got to the market. Simply because they said so.
Beyond the cultural bias about being the bearer of ill tidings, what we have working here is the result of the looting of the banks by the political elites. A large proportion of the elites are People’s Liberation Army apparatchiks and their families.
Someone once ask Willy Sutton, the bank robber, why he robbed banks. He said, “Because, that’s where the money is.”
Don’t worry, they will be able to prop some up using the massive amount of american dollars they built up through the large current account surpluses with the US. They are due for a correction anyways.
Don’t forget the billions we, the Canadian taxpayer give to China every year. And Martin, Strong and Powercorp are heavily involved in China too–think how much more they can funnel into that pot from our pockets.
Don’t suppose some of our NGO agencies hard at work with the Chinese have been showing them how to promote national unity do you?
Anyone correlated these numbers with envelope and suitcase production in China?
Is the next unit of measurement of cash after ‘envelope’, ‘suitcase’ the ‘cargo container’?
Power Corp., Bombardier, and Nortel have their snouts deep in China, natch, and are being quite helpful in aiding the PLA gain valuable new lebensraum:
Bombardier draws fire over Chinese rail project
PETER HADEKEL,
The Gazette,
April 15, 2005
Bombardier announced in February that a joint venture it has formed has won a contract to supply 361 rail cars for the new train line being built to link the city of Lhasa in Tibet with eastern China. Bombardier’s share of the deal is worth $78 million.
Activists fighting to end more than 50 years of brutal Chinese repression in Tibet say the railway is the linchpin in China’s long-term strategy of
subjugating the region.
Once it’s completed in 2007, the line is expected to bring an overwhelming influx of Chinese settlers into Tibet – as many as 100,000 per month.
This resettlement could swamp the Tibetan population of 6 million and establish facts on the ground that would make the goal of Tibetan autonomy from China harder to achieve.
Power Corp. of Montreal is a joint-venture partner in the railway, along with state-owned China South Locomotive and Rolling Stock Industry Corp. And
Nortel Networks Corp. has been selected to supply a digital wireless communications system for the line, which traverses the Himalayan plateau at altitudes of up to 5,000 metres.
Bombardier has been targeted because it’s seeking $700 million in financial assistance from the government of Canada for its new family of passenger jets.
http://www.tibet.ca/en/wtnarchive/2005/4/15_1.html
March 8, 2004 For Immediate Release
CHINA PROTECTS PROPERTY RIGHTS � NOT CANADA!
�Both Chairman Mao and Chairman Paul wrote Red Books and then did whatever they wanted.�
OTTAWA � �Today in the House of Commons, Garry Breitkreuz, Official Opposition Critic for Firearms and Property Rights challenged Prime Minister Martin to do what China has done � provide protection for property rights in our Constitution.
Mr. Speaker last week several of our newspapers reported that Communist China is changing its constitution to embrace the most fundamental principle of capitalism, that being the protection of private property rights. The question our Prime Minister must answer is: Why isn�t Canada doing the same? Surely he must know that the protection of private property was purposely omitted from the Canadian constitution.
The leader of the Liberal Party has so many things in common with the Chairman of China�s party. For example, Chairman Paul had his CSL ships built in China � not Canada. And, both Chairman Mao and Chairman Paul wrote Red Books and then did whatever they wanted.
Farmers on the prairies, environmentalists, and those analyzing Liberal legislation over the past few years all recognize that the omission of property rights from our Charter of Rights and Freedoms has undermined the very fabric of our free and democratic society.
Why doesn�t our Prime Minister recognize what China has just recognized � that, property rights are the foundation of a strong, vibrant economy?
For more information on Garry�s 10-year fight for better protection of property rights in Canada please click here: http://www.garrybreitkreuz.com/property.htm
-30-
This is kinda fun, like singing “Ring around the Rosie” with one fifth of the world’s population.
I wonder who’s pockets is getting full of posy and when do we all fall down?
Ring Around the Rosie refers to the Black Plague in London, posey in your pocket wards off the disease, husha husha is the cold like symptoms and then we all fall down dead, hopefully it’s the Libranos funeral we will be attending.
fascinating article though, truly if China falls we are all in deep kaka
The Murray Rothbard book America’s Great Depression quoted by Krassimir Petrov in this article is online here.
In terms of fiscal prudence and plain old morality, there is very little to choose from between the governments of China, Canada, USA or virtually any other nation on earth. They’re all a bunch of Robert Mugabe wannabes, and if we let them continue in this direction they’ll be just as destructive in the end. Throughout history there have always been nations which have self-destructed through inflation, but never before have all the nations of the world done it simultaneously.
At the heart of this issue are the two fundamental misconceptions which most people labor under, namely (1) government is their Daddy; and (2) money grows on trees. Probably the biggest imbeciles on earth are Canadians, because I don’t know of a single other country whose people trust their government and its social programs and its monetary policy so much, that they don’t bother to save a single dime for the future.
Canada was a nation of savers. the origial settlers being more rural Scots(they would have called themselves Scotch– but now its now PC) then the government stepped in with their social “safety net” and for only 50% of your income provides a bureucracy that provides you with 20% service , the rest being sucked up in the system of cheques, funding and administration. there was a time that the Catholic church provided all the health and welfare services for 10%. The governments of the day provided the policing and armies with an import duty. we have little of that left, excepting alot of lawyers.