China's bank bailout needs rethinking...

Article Abstract:

The bad-loan problem continues to pervade in China because Chinese banks still provide subsidies to unprofitable state-owned companies. To solve the problem, the Chinese government adopted a method that has been used and proven successful in rescuing the US savings and loan industry. The method's effectivity is being tested with the establishment of the China Xinda Asset Management Co, which was formed to buy failed savings and loans of China Construction Bank and sell these bad assets to private individuals. Economic analysts, however, are pessimistic with regard the method's effectivity.

Commercial Banking, Organizational history, Business Financing, Methods, Finance, Brief Article, China Construction Bank Corp., Asset-liability management (Banking), Asset liability management (Banking), Bank failures, China Xinda Asset Management Co

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... as is a serious debt cleanup

Article Abstract:

85 The problems plaguing the banking industry of China will be greatly eased if the government will seriously address the issue of cleaning up bad debts. The call for reforms in the industry all the more becomes urgent considering the fact that China's banks have a bad-loan portfolio ranging from 20-50%. The high ratio of bad loans, in turn, is impeding the proper conduct of business. A proposed solution such as the debt-to-equity scheme should go beyond superficial motions and must be supplemented with policies encouraging competition, budget constraints and ownership diversification.

Financial analysis, Bad debts

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China isn't ready for privatization

Article Abstract:

China's partial privatization policy is not working despite the 20 years that the government has spent trying to revitalize state-owned enterprises. The process involves changing its socialist market system by integrating stock exchanges. However, partially privatized firms have enjoyed only limited benefits since their form of ownership is without control. Before China could fully realize the fruits of privatization, a complete passage of ownership should pass into private hands and a complete reform of the judicial system should first be accomplished.

Government domestic functions, Administration of General Economic Programs, General Economic Programs, Privatization, Privatization (Business), Government business enterprises, Public enterprises

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