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No Plan B for Fragile China
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After overly aggressive bank lending following the financial crisis of 2008 China is now badly overextended. China has also learned from the U.S. experience about the risks inherent in growth generated from a credit boom. In 2009-2010 China was also getting less bang for the buck in terms of the increase in lending needed to generate growth compared to earlier periods. Orlik says don't expect China to help the global economy the way it did in 2009-2011, and that there is no Plan B for China.
Loose monetary policy in China in 2010-2011
03/07/2009
Difficulties of making a soft landing after the huge lending boom in China in 2009-2010 continues into 2011. Inflation and other risks from this lending continue. The burden of large local government debt in China and non-performing loans in the banking system. China's local government debt is estimated to be between 27% of GDP to 42% of GDP. Because of the opaqueness of the financial system the exact amount is not clear and estimates vary.
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China's 'Shadow Banks' Fan Debt-Bubble Fears
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Credit Warnings Offer World a Peek Into Chinaâs Secretive Banks
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Central Bankers Hone Tools to Pop Bubbles
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The U.S., China, and 'Rebalancing' the World Economy
01/07/2010
'Rebalancing' is the idea that China will consumer more US goods and export less to the US, reducing the lopsided trade imbalance between the two countries. China's government continues its focus on exports and infrastructure in 2009-2011. China's banking system focusses on lending to state-owned companies and the system does not have the attitude, incentives or the mechanisms and experience to increase lending to consumers or small business. Experts say rebalancing is doubtful without serious changes in the banking system and government policy which are not likely.
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Wall Street Journal 07/15/2013
New York Times 12/18/2011
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Fixing a Perception Gap for the Underappreciated G-20
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Adidos and Hotwind? In China, Brands Evoke Foreign Names, Even if They’re Gibberish
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China's banking system in 2010-2015
01/12/2010
The effects of the stimulus spending binge and speculative behaviours of local governments and state owned companies, on the loans made by state owned banks.
Grouped Articles
Asia Goes on a Debt Binge as Much of World Sobers Up
Wall Street Journal 05/24/2013
China's 'Shadow Banks' Fan Debt-Bubble Fears
Wall Street Journal 06/24/2013
China's Silver Linings Playbook
Wall Street Journal 06/24/2013
Wall Street Journal 06/25/2013
China Central Bank Warns Banks on Liquidity
Wall Street Journal 06/25/2013
Credit Warnings Offer World a Peek Into Chinaâs Secretive Banks
New York Times 06/24/2013
Large exposure to local government financing vehicles of China's smaller banks
06/17/2010
Larger banks have a smaller portion of their loans made to local government financing vehicles than the larger banks. Agricultural Bank of China, Construction Bank of China, Bank of China, Industrial and Commerical Bank of China have 6-7% of their loans made to local government financing vehicles, compared to 20% for Everbright Bank and 13-20% for other smaller banks. This means they will be the first to be in trouble in a financial crisis because of the high risk and poor asset quality of such loans.
Grouped Articles
Asia Goes on a Debt Binge as Much of World Sobers Up
Wall Street Journal 05/24/2013
I.M.F. Tells China of Urgent Need for Economic Change
New York Times 07/17/2013
China's Credit Levels Echo U.S. Crisis
Wall Street Journal 09/08/2013
Chinese Banks' Divided Capital
Wall Street Journal 10/31/2013
Chinese Bank Regulator Warns of Loan Risks
Wall Street Journal 06/17/2010
BusinessWeek 07/29/2010
China in the global financial crisis of 2008.
10/20/2008
The impact of the global slowdown on China's economy and the impact of China's slowdown on the USA, Germany, Japan and South Korea and other countries.
Grouped Articles
Chinese Bank Regulator Warns of Loan Risks
Wall Street Journal 06/17/2010
Trade Losses Rise in China, Threatening Jobs
New York Times 01/14/2009
South Korean Exports Take Massive Hit
Wall Street Journal 02/02/2009
Tax Cut Spurs 25% Rise in Chinese Auto Sales
Wall Street Journal 03/11/2009
As Factories Fail, China's Business Law Does, Too
BusinessWeek 04/02/2009
New York Times 04/03/2009
China's economy after the global economic crisis of 2008.
01/14/2009
Stimulus spending, surge in bank loans.
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Tax Cut Spurs 25% Rise in Chinese Auto Sales
Wall Street Journal 03/11/2009
New York Times 04/03/2009
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China Bank Airs Concern Over Loans
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Wall Street Journal 07/25/2009
A New U.S. Dialogue With China
Wall Street Journal 07/27/2009
The views of Derek Scissors and other experts on China's economic prospects after 2010.
01/07/2010
The likelihood that the economy will stall without change. The declining effect of large stimulus and fixed investment in producing growth. The interests of state-owned companies in continuing with the current system.
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U.S. Stocks Shrug at China's Woes
Wall Street Journal 07/10/2013
New York Times 12/18/2011
China's banks: Great Wall Street
Economist 07/10/2010
Banyan: Afloat on a Chinese tide
Economist 09/02/2010
Xi Faces Test Over China's Local Debt
Wall Street Journal 12/31/2013
Chinese debt: The great hole of China
Economist 10/17/2014
Off-balance sheet shadow lending by Chinese banks.
01/12/2010
Even after the efforts to restrain lending in 2010 in China following heightened stimulus lending in 2009, the level of bank lending has exceeded 10.5 trillion yuan and is at the same level as 2009. This includes the lending through trusts and other mechanisms according to Fitch Ratings. This explains the inflationary pressures and property bubble.
Grouped Articles
Asia Goes on a Debt Binge as Much of World Sobers Up
Wall Street Journal 05/24/2013
China's 'Shadow Banks' Fan Debt-Bubble Fears
Wall Street Journal 06/24/2013
China's Silver Linings Playbook
Wall Street Journal 06/24/2013
Wall Street Journal 06/25/2013
China Central Bank Warns Banks on Liquidity
Wall Street Journal 06/25/2013
Credit Warnings Offer World a Peek Into Chinaâs Secretive Banks
New York Times 06/24/2013
China- inflation, the currency, and economic mismanagement, the situation in 2010-2012
01/07/2010
Efforts to strengthen the currency are being resisted by export interests. Inflation is hurting consumers who are limited to earning 2.75% interest on savings, with the interest rate spread designed to help banks earn their way through bad loans made during the stimulus lending binge. A massive reallocation of resources away from consumers and towards lending to state-owned companies which create overcapacity in industries and engage in real estate speculation. Far from rebalancing the world economy this will affect internal growth in China.
Grouped Articles
Wall Street Journal 07/15/2013
China Inflation Rises to a 19-Month High
New York Times 06/11/2010
Wall Street Journal 09/04/2010
An Accord (and Lessons) to Remember
Wall Street Journal 09/21/2010
World Bank Deletes Critical Passage on China
Wall Street Journal 07/05/2015
New York Times 01/20/2011
China's local government debt poses a risk for the economy
06/17/2010
China's local government debt is estimated to be in the range of 27% to 42% of GDP. Loans by banks to local government financing vehicles face high risk of default.
Grouped Articles
Asia Goes on a Debt Binge as Much of World Sobers Up
Wall Street Journal 05/24/2013
China's 'Shadow Banks' Fan Debt-Bubble Fears
Wall Street Journal 06/24/2013
China's Silver Linings Playbook
Wall Street Journal 06/24/2013
I.M.F. Tells China of Urgent Need for Economic Change
New York Times 07/17/2013
China's Credit Levels Echo U.S. Crisis
Wall Street Journal 09/08/2013
China Think Tank Offers Reform Wish List
Wall Street Journal 10/30/2013
Risks in China's banking and financial system in 2010-2015
12/11/2010
Grouped Articles
Asia Goes on a Debt Binge as Much of World Sobers Up
Wall Street Journal 05/24/2013
China's 'Shadow Banks' Fan Debt-Bubble Fears
Wall Street Journal 06/24/2013
China's Silver Linings Playbook
Wall Street Journal 06/24/2013
Credit Warnings Offer World a Peek Into Chinaâs Secretive Banks
New York Times 06/24/2013
I.M.F. Tells China of Urgent Need for Economic Change
New York Times 07/17/2013
Charlene Chu Is the 'Rock Star' of Chinese Debt Analysis
Wall Street Journal 08/22/2013
China Stimulus Spending and investment in infrastructure- 2008-2011
08/02/2008
China's efforts to revive its economy with a large Stimulus Spending Plan.
Grouped Articles
BusinessWeek 04/14/2010
Fixing a Perception Gap for the Underappreciated G-20
Wall Street Journal 08/27/2013
New York Times 04/03/2009
Chinese debt: The great hole of China
Economist 10/17/2014
Wall Street Journal 08/25/2015
China Lets Banks Lend 5% More This Year
Wall Street Journal 08/02/2008
The economy of China in 2010-2012
12/30/2009
Hazards and prospects.
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Three Hurdles for China in the Year of the Tiger
New York Times 12/30/2009
Why the Chinese don’t spend : The New Yorker
New Yorker 01/04/2010
China Dethrones Germany as Top Goods Exporter
Wall Street Journal 01/06/2010
China Aims to Transform a Nation of Savers Into Spenders
Wall Street Journal 01/07/2010
China Sees Growth Engine in a Web of Fast Trains
New York Times 02/13/2010
BusinessWeek 04/14/2010
Growing Risks for the Chinese Economy going into 2010-2014
01/14/2010
One is a concern that China may like Japan in the 1980's is getting into a property and asset price bubble after aperiod of rapid industrialization and shifting of rural population to the cities. The risks of an overheating economy were growing with a 22% jump in a broad measure of money supply in March 2010.
Grouped Articles
Wall Street Journal 07/01/2013
I.M.F. Tells China of Urgent Need for Economic Change
New York Times 07/17/2013
Economist 01/14/2010
BusinessWeek 04/14/2010
Fear Pervades China's Stocks As Market's Gains Disappear
Wall Street Journal 05/13/2010
Europeâs Debt Crisis Is Casting a Shadow Over China
New York Times 05/17/2010
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