China's top banks may get $70b bail-out

Straits Times ^

[DeaconBenjamin]

BEIJING - Industrial & Commercial Bank of China, Bank of China and their two biggest rivals may receive a US$40 billion (S$69.6 billion) bail-out to help them clean up bad loans, the Business Post reported, citing unidentified senior central bank officials.

Bad loans at Chinese banks are estimated to comprise about half of their outstanding loans, the Beijing-based newspaper said, citing an unidentified International Monetary Fund official.

The nation's four biggest state-owned commercial banks, including China Construction Bank and Agricultural Bank of China, received 270 billion yuan (S$57.2 billion) in state funds in 1999, as they shifted 1.4 trillion yuan of bad loans to asset management companies.

Loans have continued to go bad since then, and many investors say banks will need another bail-out.

'It's almost impossible for the Big Four to rely on themselves to clean up all the bad loans and meet international capital adequacy ratio standards,' said Mr Yang Qingli, a banking analyst at Guotai Junan Securities in Beijing.

'The government may have to issue special bonds again to fund a further injection.'

The top four banks had combined bad loans of 1.8 trillion yuan at the end of 2001, according to the People's Bank of China, the central bank.--Bloomberg News

[nonliberal]

Communist thug regime we are propping up bump.

[B4Ranch]

US$40 billion I am seeing red when I think this is what our elected officials are doing with our US$40 billion tax dollars! Them sonsabitches!!!

It's time for a TAX REVOLT or a TEA PARTY. Take your pick and I'll join you. color=BLACK> I cannot imagine this happening in a REPUBLIC!

[Poohbah]

I don't see where it says that US elected officials are actually giving those banks one thin dime.

There's nothing in this article that actually states the US is coughing up the money, only an "unidentified IMF official." That could be the guy who cleans the toilets in the local IMF office, fergawdsake!

[Karsus]

No. But our goverment almost everything it can possible do to help China. Just wish the would help their own country that much.

[dennisw]

XXXXXXXX China is doing the bailing out. The amount is merely stated in US dollars!!! XXXXXXX end of transmission

[B4Ranch]

REMEMBER APRIL 2ND, 2001 ? YOUR MEMORY MUST BE SHORTER THAN MY .........HINT "EP-3"

[Poohbah]

REMEMBER APRIL 2ND, 2001 ? YOUR MEMORY MUST BE SHORTER THAN MY .........HINT "EP-3"

And the relevance of your statement to my post is...?

[morque2001]

Amazing, we have been running a trade deficit with them for years. Seems to me, they already HAVE plenty of our money. Something fishy here.

[Poohbah]

Ah. CHINA is going to piddle away forty gigabucks to bail out banks that have made bad loans.

I LOVE this! They're not really doing anything to curb the stupid and irresponsible behavior by the banks--instead, they're subsidizing it!

When someone is shooting themselves in the foot...

...consider passing them more ammunition :o)

[Enemy Of The State]

Yes, its the Chinese central government doing the bailing out. Typical old PRC tricks and thats why we cant compete with their market as easily. Hell, everytime our competition starts to go under, the freakin government writes off the bad loans.

[Poohbah]

Cool tag line :o)

[Enemy Of The State]

>>REMEMBER APRIL 2ND, 2001 ? YOUR MEMORY MUST BE SHORTER THAN MY .........HINT "EP-3"

hmm..was there something significant on April 2, 2001? I know that there was an EP-3 Plane forced down in China on April 1, but I wasnt aware of anything happening on April 2?

Me thinks someone else has a bad memory.

[Poohbah]

Maybe he's one of those 10 kinds of people :o)

[Enemy Of The State]

>>Cool tag line :o)

Thanks! I can see that you are one of the 10 who do understand :D

[Poohbah]

I once read a programming article where the guy explained the difference between decimal and hexadecimal format, and why the leading symbols were what they were.

He said, "To indicate decimal format in this article, the number will be preceded by an exclamation point. For example, the number 255 will be rendered as !0255. This notation reflects all programmers' surprise that anyone still uses decimal format. Hexadecimal format is indicated by a leading dollar sign. 255 expressed in hexadecimal is rendered as $00FF. This reflects all programmers' hopes (frequently vain ones at that) that they will be paid for their daily toil."

[Enemy Of The State]

>>This reflects all programmers' hopes (frequently vain ones at that) that they will be paid for their daily toil."

LoL

[Enemy Of The State]

Thankfully Im not a programmer. I gave it a shot a few semesters ago but I found that I have too much personality for that job... :)

Now in network engineering and while I still have to deal with Hex numbers, at least I can stay awake in class.

[Red Jones]

it boggles my mind to read these stories about economic troubles in China. Hasn't their growth rate been 12% or more on average for over 15 years? How could they have these problems? Lots of bad loans in a boom economy, not supposed to happen?!

[DeaconBenjamin]

1st: What is the source of China's growth figures? If the PRC government, how reliable are they truly? I don't know the answer, so I'm asking.

2nd: Corruption can absorb a tremendous amount of profits.