Are Chinese Banks Hiding "The Mother of All Debt Bombs"?

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Minsheng Bank H1 profit surges 36.9% to RMB 19 billion

Minsheng Bank H1 profit surges 36.9% - Globaltimes.cn

 

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Bank of Communications H1 profit up 18% to 58.39 billion yuan.

Bank of Communications H1 profit up 18% |Markets |chinadaily.com.cn

 

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Agricultural Bank of China H1 profits up 20% to 80.52 billion yuan .

Agricultural Bank of China H1 profits up 20% |Companies |chinadaily.com.cn

 

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Huaxia Bank H1 profit surges 42.36%

Huaxia Bank H1 profit surges 42.36% |Companies |chinadaily.com.cn

 

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Bank of Beijing's net profit up 25.51% in H1.
http://www.highbeam.com/doc/1G1-301024081.html

 

[LETHALFORCE]

China banks hiding massive credit bubble | Times 247

China banks hiding massive credit bubble

Financial collapses may have different immediate triggers, but they all originate from the same cause: an explosion of credit. This iron law of financial calamity should make us very worried about the consequences of easy credit in China in recent years. From the beginning of 2009 to the end of June this year, Chinese banks have issued roughly 35 trillion yuan ($5.4 trillion) in new loans, equal to 73 percent of China's GDP in 2011. About two-thirds of these loans were made in 2009 and 2010, as part of Beijing's stimulus package. ...

Flooding the economy with trillions of yuan in new loans did accomplish the principal objective of the Chinese government — maintaining high economic growth in the midst of a global recession. While Beijing earned plaudits around the world for its decisiveness and economic success, excessive loose credit was fueling a property bubble, funding the profligacy of state-owned enterprises, and underwriting ill-conceived infrastructure investments by local governments. ...

When the Chinese Central Bank (the People's Bank of China) and banking regulators sounded the alarm in late 2010, it was already too late. By that time, local governments had taken advantage of loose credit to amass a mountain of debt, most of it squandered on prestige projects or economically wasteful investments.

Read more: China banks hiding massive credit bubble | Times 247

 

[linking_park]

All I saw is "will" or "may".

Chinese banking industry now has total assets of 110 trillion Yuan(17.6 trillion Dollor), ten times of India GDP.
If they go into trouble, then not only China,but also the world will suffer from the effects.

But the reality is that China 's banking industry is still the world's largest profit making machine.

China 's big banks are all listing Corporation. Their financial statements are audited by PWC\KPMG\EY, do you think Americans lied to you?

And we saw in the world finalcial crisis, there are European and American banking industry failed and go bankruptcy, not Chinese banks.

 

[linking_park]

And If China really have these " problems", Why China stlill not suffer Currency devaluation and rating downgrade?

 

[Ray]

And If China really have these " problems", Why China stlill not suffer Currency devaluation and rating downgrade?

That is such a well known idea that it requires elaboration?

 

[LETHALFORCE]

Chinese Deflation and Currency Depreciation Coming Soon - Forbes

Chinese Deflation and Currency Depreciation Coming Soon

On Friday, an economist with the State Council's Development Research Center issued a warning that consumer prices could fall in the second half of this year. "China has corrected its excessive monetary policy tightening in the last quarter of 2011, but the speed and effort of turning-around are not sufficient," wrote Wu Qing in a government newspaper, China Economic Times. "A typical deflation will emerge," Wu predicted, if the central government does not take decisive action. The last month that China saw a year-on-year decline in consumer prices was October 2009.

This week, Beijing's National Bureau of Statistics will issue the Consumer Price Index for January, and analysts expect another fall in the rate of inflation. In December, consumer prices, as measured by the index, rose 4.1% over the same month in 2010. That number was down from November's 4.2% year-on-year figure. Inflation peaked in July at 6.5%.

The official inflation numbers undoubtedly mask the full extent of price increases, but they correctly show the trend. And should China actually fall into deflation later this year, as Wu suggests, that would be just another indication of a general falloff in economic activity.

And so would a decline in the value of the Chinese currency. Wu Qing also predicted that, unless the People's Bank of China intervenes, the renminbi will depreciate this year. This seemingly startling forecast reflects behind-the-scenes mutterings in the Chinese capital about unwelcome declines in export surpluses due in large part to falling orders from Europe.

Whether because of market forces, as Wu suggests, or by official action, the Chinese currency is on a downward path. And a cheapening currency is another sign of a weakening economy.

Why do analysts question Beijing's announcement of 8.9% GDP growth in Q4 2011? Because China's other numbers suggest the economy is in fact faltering. It is, for instance, virtually impossible to reconcile the most recent government growth projection for this year—8.5%, from PBOC adviser Li Daokui—with Wu's warnings of currency depreciation and second-half deflation. When we look at Beijing's statistics for vehicles sales, property prices, or electricity consumption, we get the picture of an economy in trouble, growing at perhaps the same anemic rate as America's.

What should Beijing do? Wu's colleague at the prestigious Development Research Center, Zhang Chenghui, also suggested that the government loosen credit, writing that there is already "a shortage of money." Yet Premier Wen Jiabao, China's top economic official, still believes that the government must act to rein in the economy. Until he abandons his "fine tuning" policies by opening the money taps wide, China will continue to skid. So far, the most Mr. Wen has done is mandate one decrease in the bank reserve ratio requirement.

Despite mildly pessimistic forecasts for the current quarter, many analysts don't worry about the downturn, arguing that it was what policymakers wanted all along. They're probably wrong, because growth-obsessed central officials acted two years ago to stop property prices from rising further, not trigger declines. In any event, even those who trust the skills of the Beijing's fabled economic planners must admit that the onset of deflation and a depreciation of the renminbi would indicate that events were passing beyond their control.

We are, as Wu Qing's comments tell us, almost at that stage.

 

[sesha_maruthi27]

Let us see what happens.........

 

[Armand2REP]

We are already witnessing what has happened. The Chinese growth engine has come to a screeching halt creating a ghost economy.

 

[linking_park]

Chinese Deflation and Currency Depreciation Coming Soon - Forbes

Chinese Deflation and Currency Depreciation Coming Soon

On Friday, an economist with the State Council's Development Research Center issued a warning that consumer prices could fall in the second half of this year. "China has corrected its excessive monetary policy tightening in the last quarter of 2011, but the speed and effort of turning-around are not sufficient," wrote Wu Qing in a government newspaper, China Economic Times. "A typical deflation will emerge," Wu predicted, if the central government does not take decisive action. The last month that China saw a year-on-year decline in consumer prices was October 2009.

This week, Beijing's National Bureau of Statistics will issue the Consumer Price Index for January, and analysts expect another fall in the rate of inflation. In December, consumer prices, as measured by the index, rose 4.1% over the same month in 2010. That number was down from November's 4.2% year-on-year figure. Inflation peaked in July at 6.5%.

The official inflation numbers undoubtedly mask the full extent of price increases, but they correctly show the trend. And should China actually fall into deflation later this year, as Wu suggests, that would be just another indication of a general falloff in economic activity.

And so would a decline in the value of the Chinese currency. Wu Qing also predicted that, unless the People's Bank of China intervenes, the renminbi will depreciate this year. This seemingly startling forecast reflects behind-the-scenes mutterings in the Chinese capital about unwelcome declines in export surpluses due in large part to falling orders from Europe.

Whether because of market forces, as Wu suggests, or by official action, the Chinese currency is on a downward path. And a cheapening currency is another sign of a weakening economy.

Why do analysts question Beijing's announcement of 8.9% GDP growth in Q4 2011? Because China's other numbers suggest the economy is in fact faltering. It is, for instance, virtually impossible to reconcile the most recent government growth projection for this year—8.5%, from PBOC adviser Li Daokui—with Wu's warnings of currency depreciation and second-half deflation. When we look at Beijing's statistics for vehicles sales, property prices, or electricity consumption, we get the picture of an economy in trouble, growing at perhaps the same anemic rate as America's.

What should Beijing do? Wu's colleague at the prestigious Development Research Center, Zhang Chenghui, also suggested that the government loosen credit, writing that there is already "a shortage of money." Yet Premier Wen Jiabao, China's top economic official, still believes that the government must act to rein in the economy. Until he abandons his "fine tuning" policies by opening the money taps wide, China will continue to skid. So far, the most Mr. Wen has done is mandate one decrease in the bank reserve ratio requirement.

Despite mildly pessimistic forecasts for the current quarter, many analysts don't worry about the downturn, arguing that it was what policymakers wanted all along. They're probably wrong, because growth-obsessed central officials acted two years ago to stop property prices from rising further, not trigger declines. In any event, even those who trust the skills of the Beijing's fabled economic planners must admit that the onset of deflation and a depreciation of the renminbi would indicate that events were passing beyond their control.

We are, as Wu Qing's comments tell us, almost at that stage.

Another "will".....
At least there is India suffer currency depreciation and rating downgrade now...not China.
At least we still have a AA rating when India get a BBB- rating

 

[Armand2REP]

China Downgrades Coming - Forbes

 

[LETHALFORCE]

Another "will".....
At least there is India suffer currency depreciation and rating downgrade now...not China.
At least we still have a AA rating when India get a BBB- rating

ratings are meaningless for india the economy is not based on debt like china.
bonds are not popular in india.

 

[tony4562]

ratings are meaningless for india the economy is not based on debt like china.
bonds are not popular in india.

India's external debt is roughly half as much as China's, yet her economy is only a quater in size compared with the latter and the world owes China a lot more than they do to India. China's position is far more comfy than India's, doesn't matter how you cut it.

A huge economy, 4-5 times biger than India's.
A hugely devloped manufacturing sector, 10 times bigger.
Runs trade surpluses year after year, something India can only dream of.
A well developed infrastructure which India won't even sniff before 2050.
Food production depending on the type 2-5 timer larger, thus worst case scenarios is now accounted for
A huge foreign reserve to fall back on

Mean time, Indis' economy is completely tanking, with her tiny foreign reserve dwindling due to mounting bills of oil import, and a currency becoming less wortyh by the day, meanwhile inflation runs rampant, imports keep raising and the population keeps adding 20 million heads each year.

If I were forced to write something nice about India for an exam, I would probably get zero cause there is absolutely nothing to write about. The whole country is rotten to the core, politically or economically. The only poeple who have something going are religious extremists and maoist rebels.

 

[huaxia rox]

ratings are meaningless for india the economy is not based on debt like china.
bonds are not popular in india.

so basically what data that indicates indian economy is not doing well is meaningless....is that what your trying to convince us??

1 if ratings are meaningless for india then what is meaningful for india???GDP per capita in USD term??? and ratings are also meaningless for what other nations???just india the sole country in the world???

2 if india is doing well how come GoI had to reduce the number of your poor people by cutting down your poverty line?? if your economy is growing well why you had to do that?? anyone in any part of the world is doing well is also doing this handy job to get people out of poverty??

3 if indian economy is doing well how come rupee is going against USD like a failed rocket that is heading towards the dust???

4 if indian economy is doing well why your india tower poject that was supposed to be the 2nd highest building in the world got no fund to go ahead in bombay...your economic canter??

seriously i am not saying your whole economic data must have been cooked like some reports revealed and clearly suggested but at least your economy is at best in a temporay but huge trouble which you need heeps of efforts to make on track again....

 

[huaxia rox]

The record-breaking yuan | FX-MM

Somewhat overlooked in recent weeks amidst the stupor besetting the foreign exchange market has been the record run of the renminbi. Overnight, the RMB recorded a fresh 19yr high. Since late July, it has appreciated by more than 2% against the weakening dollar, the latter dragged down by the Fed's preparedness to resort to more money-printing in order to stimulate the economy. There has also been a strong political dimension to the RMB's rise, with policy-makers in Beijing keen to avoid the currency becoming the centre-piece of the US presidential campaign. China itself is undergoing an immensely fraught political transition; once the new leadership has bedded down we can expect numerous pro-growth policy announcements which will support the economy and probably assist the currency. Finally, the renminbi has drawn strength from recent signs that the economy is stabilising, after what has been a very difficult year. House prices in the major cities have increased for four straight months, exports seem to have turned the corner and jobs' growth remains solid. Tonight's Q3 GDP is eagerly awaited – although it will likely show that growth slowed further last quarter – but nevertheless there is a growing expectation that the current quarter will see an improvement.

 

[huaxia rox]

http://finance.kankanews.com/qita/2012-10-25/1688353.shtml

RMB record high again......looks like the doom and gloom of chinese economy can only be deeply known by all my indian expert friends here while people doing real investment and to be accuate the world market havnt developed that ability my indian friends now have.........