Chinese banks write-off US$300 billion since 2013
(27 June 2016 – China) Since 2013, Chinese banks have written off more than US$300 billion (A$403 billion) of bad loans a senior official stated last week.
Wang Shengbang, a high-ranking official with the China Banking Regulatory Commission (CBRC), stated that the country’s banks had seen their non-performing loan ratios rise consistently for four and a half years, reaching 1.75 percent at the end of March.
“Current figures show the banking sector’s operation is generally stable and the risks are under control,” he told reporters.
“The CBRC took precaution measures in advance and in 2011… required banks to set aside more in provisions while the economy was in an upturn cycle so that we were able to accommodate huge write-downs when the economy was in a downturn cycle,” he added.
Government agency, the China Academy of Social Sciences (CASS), estimated that the country’s total debt reached 168.48 trillion yuan (A$34 trillion) at the end of 2015, equivalent to 249 per cent of the national GDP. However, according to researchers, the greatest risk lies with China’s non-financial corporate sector.
Reports suggest that government officials declined to discuss debt levels of state-owned enterprises at the briefing, instead referring the issue to the “relevant authorities”.
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