December 04, 2008
China Non-Performing Loans at $185 billion
Months into the Panic of '08 emerges again the meme that China's bad bank loans (AFP) or non-performing loans or NPL will sink the Chinese economy and doom any investor. This is an old line and was possibly relevant at the beginning of 2006 but not now.
By way of comparison, the US banking industry average of non-performing loans to total assets stood at 2.65% at the end of 3Q (September 30, 2008) a substantial increase from the historical trend. If you use data from the Fed (2006 was the most solid I could find) that figure stands around $309 billion. The US Government has committed trillions in liabilities to solve its financial crisis. Beijing is still sitting on the world's biggest heap of dollar bills. I don't see how the non-performing loans in China can be that serious a problem by comparison.
Labels: banking, panic of 2008
# posted by Sinomania! : 12/04/2008 11:44:00 PM
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