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| China-Japan-Koreas |
| Chinese banks told to sue debtors |
| 2004-05-16 |
Sunday, 16 May, 2004, 12:53 GMT 13:53 UK China’s banks should sue the firms and people whose bad debts are destabilising the banking system, the country’s top financial regulator says. Liu Mingkang, head of the China Banking Regulatory Commission, used an Asian Development Bank meeting in South Korea to urge his charges to "get tough". "You have got to sue your customers, to enhance a credit culture," he said. Correspondents say the idea is anathema to Chinese bankers, despite bad debts of more than $200bn. According to international credit rating agency Standard & Poor’s, non-performing loans at the four big state banks - between them holding 80% of loans - could amount to more than 40% of the overall loan book. Normally, banks are fairly aggressive about pursuing debts. China’s major industries are renowned for being manipulated by high ranking officials in the PLA. Could it be that these loan officers are reluctant to begin proceedings against those who ultimately dictate bank policy? Most of the defaulting debtors are state firms - and some are senior individuals in China’s hierarchy and their families. In addition, China’s legal system has a poor record when it comes to this kind of case. BINGO! Legal immunity in the form of a closed cycle ownership loop. Mr Liu’s urging forms part of the authorities’ attempts to shift some of the imbalances in China’s breakneck expansion. 2003 saw the economy grow at 9.1%, with investment in fixed assets up 47% in the first three months of 2004 on the previous year. According to Stanley Fischer - former International Monetary Fund number two and now vice-chairman of Citigroup - that spelled serious trouble for the banking system. "It is inconceivable that those rates of investment can be efficient," he told investors at the ADB meeting. The distended state of the banking system is one result and needs to be fixed before 2007, when China’s commitments to the World Trade Organisation mean it has to open up much of the banking sector to foreign competition. It has already injected $45bn ($5.4bn; £3.1bn) into the Bank of China and the China Construction Bank. Just like Hong Kong was supposed to have a larger degree of self-determinism by now. China will have this little financial Another $65bn could be on the way to bail out the banks, the Observer said on Sunday. Isn’t this just the government forgiving bad loans to its own officials? In effect, this is merely China’s putative government robbing their taxpayers in order to line the pockets of their incompetent EMPHASIS ADDED |
| Posted by:Zenster |
| #2 And people wonder why capitalism triumphed . . . |
| Posted by: The Doctor 2004-05-16 6:18:22 PM |
| #1 China’s putative government robbing their taxpayers They have taxpayers in China?? Who knew.. |
| Posted by: Rafael 2004-05-16 5:15:16 PM |