Chinas banking sector has traditionally served as a party-controlled feeding trough for its inefficient, unprofitable state-owned enterprises (SOEs), most of which were technically insolvent. The process was simple extend a loan to an unqualified SOE applicant, then write off the loan as a bad debt when it failed to repay. This situation is beginning to change, and Chinese banks are attracting the attention of foreign banks that are beginning to view them as investment opp…
Invest In China: Equity Markets
Chinas economy may be growing at the rate of almost 10% a year but its domestic capital markets are in a dismal state, forcing the private sector to disproportionate reliance on foreign investment for capital (particularly hard currency). Its domestic bond market is underdeveloped, its banks are saddled with bad debts, and both the Shanghai and Shenzhen stock markets have performed poorly in recent years.