I would guess that China's problem is like that of Japan, only larger. The government could "write down" all of the nonperforming loans or print money to deal with the problem, as the US did with the savings & loan fiasco...
On 11/17/06, Yoshie Furuhashi <[EMAIL PROTECTED]> wrote:
So, what's the truth? The government has brought nonperforming loans under control, though official figures still underestimate the problem? -- Yoshie "On the Books: Official Figures for China's Largest State-run Banks in 2005": <http://graphics8.nytimes.com/images/2006/11/15/business/20061115_BANK_GRAPHIC.jpg> <http://www.nytimes.com/2006/11/15/business/worldbusiness/15bank.html> November 15, 2006 Rare Look at China's Burdened Banks By DAVID BARBOZA BEIJING — Two years ago, one of China's largest state-owned banks hired a senior risk adviser who had previously worked for major banks in the United States. His mission was to advise the Chinese bank on how to clean up its books, by helping assess loans that were going bad. The banker's career at the China Construction Bank, however, would prove to be contentious and short. It ended with his firing in July, after he repeatedly told top executives that up to $3 billion in bad loans might have been intentionally hidden from outside auditors, just months before the bank's first sale of stock to public investors. Officials at the bank strongly dispute the assertions, saying they investigated and dismissed them. The bank called the risk adviser a disgruntled employee. But the dispute between China Construction and the banker — who spoke on condition that he not be identified because of fear of reprisals in China — provides a rare glimpse inside a banking system that analysts say continues to have widespread problems that could ultimately threaten the country's breakneck economic growth.
-- Jim Devine / "That's free enterprise, friends: freedom to gamble, freedom to lose. And the great thing -- the truly democratic thing about it -- is that you don't even have to be a player to lose." -- Barbara Ehrenreich.
