China's Nonperforming Loans and National Comprehensive Liability
AbstractThe paper presents a comprehensive analysis of China's financial situation. The main conclusion is that the financial risk of the Chinese economy is less serious than one might have predicted based on the level of the banks' nonperforming loans (NPLs), which is equivalent to 40 percent of China's GDP. If government debt (amounting to 16 percent of GDP) and short-term foreign commercial debt (amounting to 1 percent of GDP) are taken into consideration, China's overall financial risk can be regarded as still manageable, given current growth rates. This explains why China continues to enjoy financial stability despite the high level of NPLs. The paper also suggests that the correct policy for forcing reform of banks and state-owned enterprises is to keep the NPLs on their balance sheets, rather than to "swap" them into government accounts. Copyright (c) 2003 Center for International Development and the Massachusetts Institute of Technology.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by MIT Press in its journal Asian Economic Papers.
Volume (Year): 2 (2003)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://mitpress.mit.edu/journals/
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).
If references are entirely missing, you can add them using this form.