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The problems
China's real bad debt overhang estimated at 40-50 per cent of total lending.
Total problem loans estimated at more than US $500 billion when total
equity of banks is in the $100 billion range. But banks remain very liquid.
In 1998, $33 billion were injected, and in 1999 asset management
companies purchased 169 billion non-performing loans. Only about 20
per cent was later recovered.
Assuming loan growth of 8 per cent and no new NPLs and write-offs, it will
take 10 years to reduce NPL ratio to 15 per cent.
For MNCs -- from gold rush to facing the reality
But Peugeot & Kraft quit
Many left as it was difficult in the initial phase
China has a high regulatory environment
Fragmented marketplace
Accessible market often smaller than expected
Wholesale distribution is very complex
War to hire local educated talent
All that China knows is cutting prices
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