主题：【原创】茗谈（95）：织锦 -- 本嘉明

回去基本上有一小半是空的...

1. The real estate bubble drains investment and consumption power.

2. The banking system was overstretched and exposed to one single biggest industry, real estate (which is deeply involved in all kinds of speculation).

REAL ECONOMY WAS SHRINKING AND CREDIT-SUPPORTED speculative economic activities are still booming.

I have never seen one industrialized nation that won global status/respect through ever increasing housing price.

China could be the first exception, haha. But remember before that, there are Japan in 1980s, US and Ireland before 2007. They all believe in the same way...

I want to remind domestic Chinese the nonperforming loan problem in China's banking system.

Below is the non-performing loan ratio history (according to the general practice, non-performing or non-accrual loans are defined as loans that have been delinquent on interesting or principal payment for more than 90 days) in China’s banking system. Original data come from various issues of World Bank publications.

2001: 29.4%

2007: 6.2%

2008: 2.4%

2011: 1.1%

The 2007 (6.2%) ratio was still very high compared with most industrialized nations. Therefore there was nothing to be proud of. The U.S. banking system had bad debt problem since housing collapse, its peak level is in 2009 (5.4%).

China's nonperforming loan ratio declined because of one major reason: there was A PERIOD OF CRAZY CREDIT EXPANSION since late 2008, pressured by premier Wen. Newly extended loans have diluted the bad debt problem.

Those new loans lent out in the crazy years of 2009-2011 will come home to haunt Chinese banks and China's economy very soon. Currently, people are just using all kinds of dirty tricks (e.g., shadow bank lending) to cover up their problems.